LABELLING AND PRODUCT LIABILITY Janusz Luterek, partner at Hahn & Hahn Attorneys, told delegates at the African Label Indaba Conference that the Consumer Protection Act (CPA) creates a “no fault” liability by importers, manufacturers, wholesalers, and retailers for hazardous or defective products as well as insufficient instructions or harm caused due to the failure to warn of harm that may occur in plain and understandable language. He explained that layout, use of vocabulary and images all need to be considered to ensure that an ordinary person of the class of intended consumer (with average literacy skills) can understand the significance and importance of the information and instructions provided on packaging and inserts. Luterek emphasized that “no fault” liability makes it imperative to label products correctly, and to warn of allergens and any other risks when issuing storage instructions, preparation instructions, as well as safe use and disposal instructions. He said that in addition to protecting consumers’ rights to safe, quality goods, the CPA also protects their right to honest labelling and marketing by banning: * Exaggeration, puffing and innuendo. * Claims of benefits/characteristics that are not actually found in the product or provably achieved through the use of the product. * Only exchanges - as consumers have the right to return goods for a refund within specified timeframes. Enforcement The CPA is enforceable by the Ombudsman for Consumer Goods, provincial consumer protectors and the National Consumer Commission (NCC), which investigates claims on behalf of the National Consumer Tribunal. This tribunal can issue an administrative fine of up to R1m or 10% of a company’s turnover and/or a Section 115 notice that will enable a consumer to sue a particular company for actual losses, but not punitive damages like in the US. In certain instances it is possible for the tribunal to issue 12 months imprisonment sentence instead of an administrative fine. Recall guidelines “Section 60 of the CPA makes provision for both voluntary and compulsory recall procedures to ensure that mislabelled products cannot simply be withdrawn quietly - by obliging companies to officially notify the NCC in the prescribed manner, to publicise the recall, and to conduct the recall transparently. “If substantial time has passed and a supplier has not done the right thing, the NCC will order a recall and charge the supplier for the costs. Remember that consumer safety is of primary importance to the NCC - cost is no object,” Luterek stated. He advised companies to rather institute a voluntary recall to prevent/limit harm to consumers quickly, reduce the number of claims for harm caused, limit the extent of prosecution by the NCC and the fine imposed, and to reduce reputational harm. Currently under scrutiny Luterek warned that consumer activism is exploding with NGOs funding organisations such as ACB to force issues such as GM labelling. In addition, individual activists are taking on industry, government and retailers over “deceptive marketing” practices. “With elections coming up next year (not forgetting that consumers are voters) government needs to be seen to be taking some kind of action and has identified the following high risk issues for review: • Genetically modified foodstuffs. • Brine in individually quick frozen chicken and misleading labelling. • DNA of exotic species in processed meat products. • Cream cakes and confectionery and the use of imitation cream products instead of ‘real dairy cream’. • Sell by/best before dates - expiry of foodstuffs. • Imported ingredients not disclosed on ingredients lists or misleading disclosure. For example, ‘Product of RSA or Zambia or China’. • Correct classes on fruit and vegetables. For instance, not all potatoes can be ‘first grade’.” * The African Label Indaba Conference was hosted by VDS Media and the Institute of Packaging SA in Sandton yesterday.
Posted on: Wed, 21 Aug 2013 08:07:56 +0000
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