Home-grown consumer courts

Consumer Courts is a concept that is prevalent in many jurisdictions in different ways. In Sri Lanka the enforcement of consumer matters are done through the traditional court system.

The implementation is done through the Magistrate’s Court and regulatory powers are being tested and executed by the Supreme Court and the Court of Appeal. In Sri Lanka the aggrieved party generally invokes jurisdiction of the court via the CAA which has power to regulate Trade and to help consumers.

Indian consumers are fortunate to be covered by the Consumer Protection Act of 1986, especial Consumer Courts and a directorate to implement the Act. There is also the package Communities Act which insists that weights, price, date of manufacture and ingredients are marked on all packages.

This Act as well as AG Mark and ISI Mark can be of substantial assistance in the fight for consumer rights. Vigilant consumerism can put it into their function.

In Sri Lanka though there are no Consumer Courts, some courts have administrative arrangements. For e.g. in Colombo, the Maligakanda MC has the bulk of consumer matters. But what is needed today is a more organised and a modern system to pave the way for the consumers to litigate for their rights independently as in India.

The CAA has mooted this concept from the beginning of last year and the response from the public is encouraging. It is also very encouraging that the Minister of Trade and also the Minister for Consumer Affairs has taken the responsibility to establish a system with the help of the Ministry of justice and other relevant authorities.

Now it is time for consumer groups to get together and help the Authority and the Ministers to launch this programme in order to achieve the objectives of the CAA and generally the consumers at large to pave the way for consumer items of high quality and standard at a reasonable price.

We can learn lessons from Australia, the USA and India on this matter in different ways. Our consumers are well acquainted with our Act through our page. We reproduce for the benefit of our consumer, the Consumer Protection Act which enshrines the rights of the consumers under the Indian Consumer Act.

* Right to be protected from hazardous goods and services

* Right to be informed about the quality and performance of goods and services

* Right to free choice of goods and services

* Rights to be heard in decision-making process concerning consumer interests

* Right to redress if consumer rights are infringed

* Right to consumer education

We take this opportunity to invite consumers, civil society and the other organizations to communicate with us and give us suggestions, propositions and ideas during this consultative process in order to develop a home-grown consumer courts system for better consumerism for Sri Lanka.

Sarath Wijesinghe,
Chairman Consumer Affairs Authority

Promoting competitiveness through competition

The competition policy has a significant role to play in promoting competitiveness and growth. The term “competitiveness appear’s to have aroused considerable controversy in recent years.

On the one hand, word has become a kind of umbrella term for a wide ranging set of Policies. On the other, this term evokes an analogy, which suggests that nation states compete in the same way that firms do.

It may be true that nations do not compete, but firms do. Nonetheless, it is equally true that nations may not compete, they may help the firms compete more effectively by following a set of macro policies, which can create an enabling environment. For example, the issue of clearances to set up a business, and how long it takes.

The firms competitiveness gained wide currency after the introduction of the competitiveness white paper in United-Kingdom and the European Community in mid nineties. The backdrop of these white papers was slow productivity growth and decline in relative economic positions of U.K and Europe compared with Japan and the United States of America.

The economic malaise of the U.K and European economics was thought to be poor competitiveness. The decline in the relative performance of the U.K. prompted much debate about the appropriate response. one of these areas is the policy related to fair and open market. European white papers highlighted four areas for action.

I. The promotion of investment in intangible assets.

II. The development of co-operation between firms.

III. Ensuring fair competition; and

IV. the mordernisation of public authority.

Thus, we see that both the white papers on competitiveness emphasise the need for ensuring fair competition in the market as an essential ingredient for enhancement and maintenance of competitiveness in the countrys economy. These ideas even apply in India, as well.

Empirical evidence, though focusing mainly on the experience of developed countries, has confirmed that barriers to competition within an Economy whether due to governmental or private restraints, lead to losses in income and welfare.

On the other hand, a well-designed and implemented competition policy promotes economic growth by ensuring better allocation of resources.

Executive Director - C.A.A.

Import inspection scheme

With the introduction of the free economy in 1977, imported goods began to flood into the country. Many local manufacturers were complaining about the poor quality of these imported products.

Eventually, the local manufacturers began to urge the government to impose restrictions to curb the low quality imported products. Subsequently, a steering committee had been appointed to look into the matter and suggest ways and means in managing the situation.

As a result, the Import Inspection Scheme (II scheme) was launched in 1986 only for eleven designated products.

The mechanism of the scheme was to impose regulations by the Minister in charge of the Imports and Exports (Control) Act and gazette those designated products making their conformity mandatory to the relevant Sri Lanka Standard Specifications when the products are imported to the country.

The implementation of this regulation was generally executed by the Sri Lanka Customs in conjunction with the Sri Lanka Standards Institution (SLSI). Once a consignment of a designated product arrives at the port, it is referred to SLSI to determine the conformity to the relevant standard.

The result of the quality determination is reported back to the Sri Lanka Customs and also to the Import and Export Control Department. Accordingly, the release or detaining of goods would be executed.

The originally selected eleven products for this scheme were gazetted under the provision of the Imports and Exports (Control) Act. Subsequently, the list was increased time to time by adding more products and at present 102 products are subjected to quality checks under this Scheme. These products include a variety of items such as food items, building materials, electrical appliances, cosmetics etc.

An importer, who brings a consignment of any product out of the 102 designated products, shall notify the SLSI before the consignment is cleared from the port. For this purpose, the importer needs to furnish a notification form (in triplicate) together with the supporting documents. SLSI then has to determine the conformity of the consignment against the relevant Sri Lanka Standard Specification.

Basically, the SLSI uses two optional methods to determine this conformity. The first option is that the importer is allowed to proved the conformity of the product to the relevant Sri Lanka Standard Specification. This could be done by producing a conformity certificate or by marking the products with a product certification mark.

However, when a conformity certificate is produced, it should be obtained from an organization acceptable to SLSI. This acceptance will depend on the capability of the organization (by which the certificate had been issued) in carrying out tests according to the relevant Sri Lanka Standard.

The SLSI has basically, identified two types of organizations for this acceptance. Viz.1) Accredited laboratories which comply with the SLSI’s acceptance criteria for Laboratories, and 2) Manufacturers who comply with the SLSI’s acceptance criteria for manufacturers.

When a product certification mark is appearing on the product, the certification mark should be either the SLS mark or a certification mark given by the national standards body of the exporting country.

Granting the SLS Mark to an overseas product could be considered by SLSI if the brand name owner makes such a request. If the certification mark has been granted by the national standards body of the exporting country, it should be compatible to the relevant Sri Lanka Standard Specification.

Importers are encouraged to go for the above-mentioned first option (i.e. importer providing proof for the conformity), as it eases the approval process by limiting it to perusal of documentation or certification mark, which enables quick release of consignments.

However, especially when repeated consignments are imported, whilst giving the approval (when the product conforms to the relevant standard), SLSI keeps the right to draw samples from selected consignments on random basis to verify the authenticity of the conformity certificate produced. In such situations consignment are release immediately after drawing samples.

The importers who do not submit supporting documents (conformity certificate) as described above will have to undergo the second option.

In this situation, having no proof for conformity to the relevant Sri Lanka Standard, SLSI has to determine the conformity by carrying out tests under its responsibility. For this purpose, SLSI officials will draw samples from the consignment for testing.

Going for this option is not encouraged as it is time consuming as the consignment are withheld till the laboratory tests are over and the test results are available and conforming.

If the consignment did not conform to the relevant standard, the consignment will not be released. If an importer is not satisfied with the decision taken on any consignment, he could appeal to the Director General of SLSI.

Details of the Import Inspection Scheme could obtain by visiting the SLSI’s web site www.slsi.lk

Powers Vested in CAA to regulate Trade - (2)

As discussed in last week issue there are several provisions in the CAA Act to regulate the internal trade. These powers are listed in part ii of the Act. The powers envisaged by sections 10 and 11 were discussed last week and its article reviews the provisions made in section 12 of the CAA Act.

Powers envisaged by Section 12

Section 12 says that the Authority, for the purpose of protecting the consumer and to ensure the quality of goods sold or services provided, can determine the standards and specifications relating to the production, manufacture, supply, storage, transportation and sale of any good sand to the supply of any services.

The Authority has to publish a gazette notification to adopt such standards and specifications prescribed by the Sri Lanka Standards Institution (SLSI) by a gazette notification, the Authority can make mandatory to select the SLSI standard of products.

Once an item is gazetted under section 12, no manufacturer, or trader shall manufacture, sell or display for sale, expose for sale or offer for sale that item unless it is in conformity with the corresponding Sri Lanka Standards.

Currently, the SLS mark is mandatory for the following items:

Brown Sugar, Canned fish, Cement blocks, Cement (Masonry), Cement (Portland), Condensed milk, Corrugated Asbestos Sheets, Domestic Hotplates, Electric Bulbs, Flat Asbestos Sheets, Fresh Fruit Cordials, Fruit Cordial Concentrates, Fruit Squash Concentrates and Fruit Syrup Concentrates, Household Electric Lampholders, Household Electric Plugs and Socket Outlets, Household Electric Switches, Ready to Serve Fruit Drinks, Structural Steel Angles, Structural Steel Bars, Structural Steel Wire and Synthetic Cordials. With regard to above products, the responsibility is placed on the manufacturer/producer to ensure that the products confirm to the relevant safety and quality standards at the point of manufacture. Consumers can always check whether the SLS product certification mark is on the label before purchasing.

Authority is currently in the process of revising some of these gazettes since the relevant SLS standards are updated by the Sri Lanka Standards Institute.

With regard to these items in the market investigations, the CAA has to collect suspecting samples from the market and submit to the Sri Lanka Standards Institute to obtain a technical report on the conformity to the relevant SLS standard.

Any person who acts in contravention to this provision is liable to a fine not less than Rs. 1,000 and not exceeding Rs. 10000 or to an imprisonment for a term not exceeding six months where such person is not a body Corporate. Where such person is body Corporate, is liable to a fine not less than Rs. 10,000 and not exceeding Rs. 100,000 for a first offence.

Chandrika Thilakaratne
Director, Consumer Affairs and Inforation, CAA

News in brief:

Six Consumer Organisations set up at Ampara in May/June

As decided at the beginning of the year steps have been activated to establish Consumer Organisations islandwide. During the month of May and June six organisations have been set up and are registered with the CAA.

Those who wish to establish such organisations in their respective areas are requested to communicate with the Executive Director in charge of the subject A. L. Mohideen Bawa, so that a set of forms will be dispatched in this connection: Address: Consumer Affairs Authority, 2nd Floor, 27, Vauxhall Street, Colombo 02. Tel: 011-2393577/2399146, Fax: 2399148.

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Awareness programme at Tangalle

An awareness programme for traders and consumers has been organised at the Tangalle Town Council on July 7. There has been a good response from the traders to our invitation to participate in the programme. The aims and objectives of the CAA, and related matters will be explained to the participants.

The Government Agent, senior police officers of the area and concerned officers will take part in the programme. This is one of the series of programmes to be conducted district vise by the CAA in order to educated the consumers and others of the rights and responsibilities of the CAA.

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Districts provided with communication facilities

Minister of Trade, Marketing Development, Co-operatives and Consumer Services Bandula Gunawardana handed over communication instruments to the district officers of the CAA.

The telephone numbers allocated to our district offices are given below, for the convenience commencement of the consumers.

Ampara - 0602638512, Anuradhapura - 0602858612, Badulla - 0602559582, Trincomalee - 0602658522, Galle - 0602929812, Gampaha - 0602839912, Hambantota - 0602489912, Kalutara - 0602309912, Kandy - 0602826212, Kegalle - 0602359912, Kurunegala - 0602979792, Matale - 0602668602, Matara - 0602404312, Moneragala - 0602559599, Nuwaraeliya - 0602539812, Polonnaruwa - 0602279982, Puttalam - 0602329012, Ratnapura - 0602469912.

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Seminar

The new Company Law Act is the theme of a seminar/workshop which will be held on Wednesday June 20 at the OPA Auditorium commencing at 5.30 p.m. Organised by OPA and the CAA jointly, this seminar is open to public - the response from the public sofar is encouraging.

Commercial High Court Judge Chithrasiri will be the chief guest and will deliver the keynote address as well. Other speakers scheduled to address the seminar are M/s Nihal Sri Amarasekara, Kandaiah Neelakandan, Nihal Jayawardana, D. K. Hettiarachchi, Mr. Kang Iswaran and Dr. Harsha Cabral.

Those who have still not registered their names, may communicate with Ms. Samantha Karunaratna, Media Officer for further details.