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1. 1
Consumer Protection Act 68 of 2008
Presentation to the Portfolio Committee on
Trade and Industry
14 October 2010

2. 2
Delegation
1.Ms Zodwa Ntuli: Deputy Director-General, Consumer and
Corporate Regulation Division (CCRD)
2.Ms Nomfundo Maseti: Chief Director, Policy and
Legislation
3.Mr Andisa Potwana: Director, Consumer and Competition
Policy and Law

3. 3
Outline of the Presentation
1.Purpose
2.Background on Policy Reform
3.Overview of the Consumer Protection Act (“CPA”)
3.1Objectives
3.2Consumer Rights
3.3Institutional Arrangement
3.4Functions of the National Consumer Commission
3.5Role of Provincial Authorities
4.Establishment of the National Consumer Commission (“NCC”)
4.1Project Management
4.2Risk Analysis and Management
4.3Institutional Comparative Study
4.4Assessment of State of Readiness of Provincial Authorities
4.5Planned National Consumer Commission
5.Status of the Implementation of the Act

4. 4
Purpose
To brief the Portfolio Committee on Trade and Industry on the
Consumer Protection Act 68 of 2008 and the status of
implementation of this law

5. 5
Background on Policy Reform
International Legislative Benchmarking Study
•Reviewed the laws, models and mechanisms of several jurisdictions including
Argentina, Brazil, Chile, India, UK, Finland, Australia, Ghana, Botswana and Canada.
Most jurisdictions have one comprehensive law as it provides uniformity and
certainty due to clear and upfront rules of conduct.
South African National Consumer Survey
•Interviewed consumers (72% black, 12% white,12% colored, 39 % rural and 35%
metro) to establish the extent to which they are aware of their rights, the types of
violations they have experienced and their view of what could be done to improve
access to redress.
Review of Consumer Protection Measures in South Africa
•Reviewed 70 Acts that provide for consumer protection in a range of fields and
sectors including safety, insurance, financial services, health, transport, aviation,
environment, business practices etc.

6. 6
Findings of the Study
•No statute in RSA that contains a clear statement on consumer rights;
•Certain aspects of the purchasing cycle are unregulated and are left to common
law (contracts, liability) -leaving consumers and businesses (especially small
businesses) vulnerable;
•Access to redress is limited for consumers, especially low-income earners -
industry self-regulatory schemes in the form of codes and ombudsman offices
exists but not across sectors;
•Most existing laws do not provide for enforcement and redress mechanisms -
leaving consumers in the dark on what to do with a problem or at the mercy of
the courts

7. 7
Findings of the Study
•No substantial review since 1988 when Consumer Affairs
(Unfair Business Practices) Act was introduced;
•South Africa lagging behind other international jurisdictions;
•Global and domestic environment has changed significantly;
•Opening up of markets and movement of people, goods and
services across borders;

8. 8
Findings of the Study
•Growing incidence of scams and unfair practices;
•Weak enforcement mechanisms and institutions;
•Fragmented regulation across sectors;
•Reliance on criminal sanctions (matters reported to police)to
protect vulnerable consumers and
•Outdated expensive/costly common law regime

9. 9
Overview of the Consumer Protection Act

10. 10
Objectives of the Act
•Promote a fair, efficient and transparent market placefor consumers and
business;
•Provide a consistent, predictable and effective regulatory frameworkthat
fosters consumer confidence, but also recognizes the developmental
imperatives of the South African economy;
•Provide access to effective consumer redressfor economic citizens;
•Promote better customer service in the public and private sector;
•Harmonize consumer protection framework with international best
practice.

11. 11
Consumer Rights
The new Act adopts a rights based approach with an emphasis on the following
consumer rights: (Based on UN Consumer Rights Charter)
–Right to Equalityin consumer market –prohibits unfair discrimination
–Right to Privacy –use of consumer information &“Opt Out” Register
–Right to Disclosure and Information –plain and understandable language
–Right to Choice –bundling of goods, cancellation of contracts 20 days Notice
–Right to Fair and Responsible Marketing–bait, referral negative option
–Right to Honest Dealings -fair contract terms, prohibits misleading representation
–Right to Fair Value, Good Quality and Safety –strict liability, recall of products
–Right to be Heard and Obtain Redress –accessible redress mechanisms

12. 12
Institutional Arrangement
•The Act establishes an investigative body, the National Consumer Commission
to enforce compliance
•The National Consumer Tribunal is established in terms of the National Credit
Act to adjudicate on consumer protection complaints –cross referencing in the
Consumer Protection Act
•Other structures recognised by the Consumer Protection Act for enforcement
are the following:
-Provincial Consumer Authorities
-Civil Society -accreditation of consumer groups to act on behalf of members
of the society –this may include Non-governmental Organisations (NGOs)
-Statutory Ombudsman
-Industry Ombuds accredited in terms of Consumer Protection Act
-Ordinary Courts to handle matters relating to unfair contracts

13. 13
Functions of the Commission
•The functions of the NCC are as follows:
–Investigate and prosecutecomplaintsbefore the National Consumer
Tribunal;
–Monitor consumer marketand producing trend analysisreports;
–Advocacy and legislative reform (with governmentand sector regulators);
–Receive and resolve complaintsconcerning prohibited conduct under the
Act;
–Promote consumer protection in organs of state;
–increase knowledge of the dynamics of the consumer market and promote
public awarenessof consumer protection matters through research and
public information;
–Develop and maintain relationswith other regulatory authorities;
–Promote of informal dispute resolution;
–Accredit and monitor industry codes of conduct and ombud schemes; and
–Negotiate undertakings and consent orders.

14. 14
Role of Provincial Authorities
A provincial consumer protection authority has jurisdiction within its Province
•issue compliance noticesin terms of this Act on behalf of the Commission to
any person carrying on business exclusively within that province;
•facilitate the mediation or conciliationof a dispute arising in terms of this Act
between or among persons resident, or carrying on business exclusively
within that province;
•refer a dispute to the provincial consumer courtwithin that province, if there
is one; and
•request the Commission to initiate a complaintin respect of any apparent
prohibited conduct or offence in terms of this Act arising within that province

15. 15
Establishment of the National Consumer
Commission

16. 16
Project Management
•A fully functional Steering Committee was established and comprises of Ms
Zodwa Ntuli (DDG CCRD), Mr Ebrahim Mohamed (Chief Director: Office of
Consumer Protection (OCP) and Ms Busi Ngwenya (Director: Strategy and
Special Projects)
•A Business Case developed and submitted to National Treasury and to
submitted to DPSA for the job evaluation process of Commissioner and
Deputy Commissioner positions –completed and approved
•Implementation and Risk Management Plan was developed and monitored
–budget allocated 2010/11 R24 800, 2011/12 R32 988 , 2012/2013
R41577
•Service Providers appointed to assist with organizational design, change
management and human capital, communication and branding/corporate
image

17. 17
Risk Analysis and Management
Risks Solutions
Approvals not received on time (NT, DPSA,
DPW)
Follow-up through DG and Minister
Not ready to establish by October 2010 Seek interventions, follow-up and set-up
meetings and defer launch
Technology specifications not meeting
Commission requirements
System (s) to be tested before Commission
opens door to the public
Communication –inconsistent messages
creating anxiety and confusion
Communication strategy and alignment of
processes internally

18. 18
Risk Analysis and Management
Risks Solutions
Regulations not completed on time and
certain functions becoming operational end
of April
OCP implementing and handling
Commission work by end of April
Benchmarking findings that could
require system or personnel
improvements
Identify, workshop as part of change
management and implement best
practice changes
Infrastructure –office space allocations
not identified/provided on time
Procurement and move activities
finalized by end of September 2010 –
sourcing additional resources if needed
Procurement procedures taking too longForward planning and stringent
deadlines without compromising quality

19. 19
Institutional Comparative Study
Activity Office of
Consumer
Protection SA
ACCC -
Australia
Office of Fair
Trading -
Australia
Commerce
Commission –
New Zealand
Hong Kong
Consumer
Council
Population Over 47millionOver 21,3millionOver 21,3millionOver 4,2million Over 6,9million
Staff Complement32 727 183 200 150
Structure Chief DirectorChair and CEO Board and
Commissioner
Chairperson and
CEO
Council and
CEO
Budget/ Funding Government
funded
Government
funded
Government
funded
Government
funded
Government
funded
Contact Centre Call Centre of
the dti
One
access/contact
number
One
access/contact
number
Centrally located
centre using one
number
Interactive voice
response
system –single
number for
whole country
Complaints Received 963 -
resolved 83%
last year
Received 96118
-resolved 74%
last year
Received 40 000
-resolved 85%
last year
Received 199 -
resolved 51% last
year
Received 40 000
-resolved 70%
last year

20. 20
Institutional Comparative Study
Activity Office of
Consumer
Protection SA
ACCC -AustraliaOffice of Fair
Trading -
Australia
Commerce
Commission –
New Zealand
Hong Kong
Consumer
Council
Training Campaigns
conducted on
the Act;
emphasis would
now be on
education; focus
on rural
communities
Focus on
training and
compliance;
more emphasis
on indigenous
community
Focus on
training and
compliance;
more emphasis
on indigenous
community
Focus on
training and
compliance;
more emphasis
on indigenous
community
Disseminate
information
through media,
magazine and
campaigns
(limited)
Technology Using dti’s
systems but will
have to migrate
Manual and e-
lodgments of
complaints and
enquiries; data
capturing to
produce trend
analysis
Manual and e-
lodgments of
complaints and
enquiries; data
capturing to
produce trend
analysis
Manual and e-
lodgments of
complaints and
enquiries; data
capturing to
produce trend
analysis
Manual and e-
lodgments of
complaints and
enquiries; data
capturing to
produce trend
analysis
Product Safety
and Testing
New function
under the Act
Perform own or
outsource –
publish results
Perform own or
outsource –
publish results
Perform own or
outsource –
publish results
Mostly
outsource –
publish results

21. 21
State of Readiness of Provinces
•Giventheconcurrentjurisdictiononconsumerprotection,thedti
consultedwithallprovincialconsumerprotectionauthoritiesto
determinetheirstateofreadinessforimplementationoftheCPA.
•Theconsultativeprocessdealtannualbudgetallocatedforconsumer
protection,rankofofficialchargedwithconsumerprotection,totalstaff
complements,existenceofaconsumercourt/tribunal,legislationin
effect,numberofcomplaintsdealtwith,andthenatureofsystemusedto
processcomplaints
•Apresentationonthefindingsofthisandappealforpoliticalsupporton
consumerprotectionwillbemadetoMINMECon14October2010

22. 22
Province Legislation
adopted
Consumer
Court/
Tribunal
Rank of Official in
charge
Staff Annual
budget
IT/ Manual
Eastern CapeYes No Senior Manager 35 R10.2 milManual
Free State Yes Yes Deputy Director 7 R1.97 mil Manual
Gauteng Yes Yes Chief Director 41 R24.4 milElectronic
KwaZulu NatalDraft No Director 14 R27.5 milManual
Limpopo Yes Yes Senior Manager 23 R9.1 mil Manual
Mpumalanga Yes Yes Chief Director 21 R10.15 milManual
Northern CapeYes No Senior Manager 6 R3.106 milManual
North West Yes No Director 19 R5.87 milManual
Western CapeYes No Director 16 R11.87 milElectronic
State of Readiness of Provinces

23. 23
The National Consumer Commission
•We plan to create a knowledge institution that:
–Is world class and comparable to institutions on same level
–Is efficient, effective, innovative and accessible
–Has functioning and accessible operating systems
–Is easily recognisable by NGOs, consumers, other stakeholders and is
accessible
–Has verifiable data and working relations with other agencies
–Is able to work smarter and optimize available resources
–Has credible, respectable and strong leadership
–Has excellent relations with provincial structures, traditional and
community structures and other regulatory agencies

24. 24
The National Consumer Commission
Deputy Commissioner
Executive
Enforcement and
Investigations
Executive
Policy, Research
and Analysis
Executive
Legal Services
Executive
Education,
Compliance &
Advocacy
Commissioner
Company Secretary
Executive
Corporate Services

25. 25
Status of the Implementation

26. 26
Status of Implementation of the Act
•The Act stipulates two dates for giving effect to its implementation as
follows:
-Early effective date–one year after signing by the President which
was 24 April 2010 –to allow the establishment of the Commission
and appointment of staff of the Commission and the Commissioner,
development of regulations, application for recognition of industry
code of conduct, exemption of other national legislation take effect
during this period;
General Effective date–all remaining provisions including
implementation of consumer rights should take place 18 months
after signing by the President -24
th
of October 2010.

27. 27
Status of Implementation of the Act
OCP has been handling the functions as of 24 April 2010for the early
implementation provisions
The general implementation date was postponed in terms of Schedule 2 item 3 of
the Act which allows Minister to defer the effective date of any provision by six
additional months -the Act will now be implemented on 1 April 2010.
Regulations to give effect to the Act are being finalized and will be published for
comment by end of October 2010.
Processes for establishment of the National Consumer Commission is on track –
process to appoint Deputy Commissioner and the Commissioner have
commenced –section 87 of the Act requires consultation with the Portfolio
Committee and Minister has initiated that process already

28. 28
Thank you…!