“Just Traders” to be recognised

For first time under free economy in Sri Lanka:

It is the mandate of the CAA to provide for the better protection of consumers through the regulation of trade and prices of goods and services and to protect traders and manufacturers against unfair trade practices and restrictive trade practices.

It is also one of the objects of the authority to protect consumers against the marketing of goods for the provision of services which are hazardous to life and property of consumers.

An aim and target of the authority is to pave the way to “just traders” and directed CAA to launch this project and alert consumers. The CAA has deviated from the traditional practice of confrontation and attack on the traders, manufacturers and industrialists and taken a more friendlier, realistic and practical approach to act symbiotically in the interest of the community at large.

Minister of Trade, Marketing Development, Co-operatives and Consumer Services Bandula Gunawardena has promoted this concept by innovating a new strategy and a program to promote and recognize just traders and directed the CAA to launch this programme after having carefully monitored and considered their behaviour especially during the last festive season organise the event to be held on August 21 at the Presidential Secretariat.

The last New Year season has been one of the busiest and challenging eras for the CAA where within few days it had to handle thousands of complaints and steps were taken to regularize trade through this process.

The response from the traders and consumers for the project is very encouraging. The Minister has thought that those traders should be commended as a precedent and encouragement for the rest of the business community as has been done in the other parts of the world and also our ancestors.

The CAA has identified 100 traders islandwide to make presentations issue certificates and to recognise them at a function on August 21 headed by President Mahinda Rajapaksa and in the presence of large number of Cabinet Ministers and dignitaries.

It is important to note that the President has taken measures to reduce the Cost of Living by taking away custom duties and granting a number of concessions to the traders in order to benefit and give relief to consumers.

This event is going to be an annual event and there will be direct and indirect benefits to the business community and consumers.

We have shown above a photograph of a trophy to be presented to “just traders” by the President. We also invite the rest of the traders to be ready to be just traders in time to come as we plan to identify thousand traders islandwide who will be benefited from this process in various ways.

Just traders in future will not only be recognised but will be encouraged and assisted to enlarge and improve their business to serve the community as we consider that trade is an honourable profession subject to regularisation.

Sarath Wijesinghe,
Chairman,
Consumer Affairs Authority

Assuring public safety and consumer protection

With the increasing variety of products and services on offer, there is an ever-increasing demand for intervention by the state to assure public safety and protection of consumer public. State regulatory authorities are called up on to implement regulations covering products, services and related delivery processes for reasons of health, safety, consumer protection, fraud prevention and market fairness.

It is important that, the areas where such state interventions are required should be carefully assessed based on associated risks and prevalence of unfair, unethical practices. This could ensure the effective use of limited resources to the maximum benefit of society.

State intervention should be planned in areas where it is identified as necessary. Strategies adopted, including implementation mechanisms should be effective in achieving the identified objectives. All State regulatory authorities need to give serious consideration to these aspects of priority in formulating regulations and implementation mechanisms for public safety or consumer protection.

Regulations and Conformity Assessments

One of the key elements in the regulatory mechanisms is the use of effective methods and strategies for assessment and verification of conformity to the laid down requirements in the Technical Regulations. In most of the current regulations in Sri Lanka, protocols and mechanisms for implementation are not adequately addressed. In many cases the implementation is not effective due to lack of resources.

Currently, the implementation mechanisms and administrative arrangements for implementation are largely oriented to post-market surveillance and monitoring. Responsibilities are with the regulatory authorities to inspect, monitor or assess the entities under reference, detect non-compliancies and take punitive or corrective actions.

All costs of verification and assessments are borne by the regulatory body. In many cases, own arrangements established by the regulatory body for inspection, testing or certifications are inadequate. Invariably such systems are faced with inadequate resources for implementation in the form of inspection capacities, testing facilities and competency etc.

Pre-market action

As compared to post-market surveillance and monitoring, the regulatory authorities should preferably stipulate pre-market requirements and mechanisms for supervision and control.

The objective of such an approach is to ensure that the product offered or services provided meet with the relevant criteria prior to it being placed or offered on the market. Under this system, the responsibility for providing evidence of compliance with the relevant requirements is placed on the manufacturer or service provider. The costs of resources for assessment and verification are borne by the producer or service provider.

The Consumer Affairs Authority, Food Authority and other regulatory bodies should preferably align its regulations to pre-market requirements, supervision and control, where feasible. In this system the manufacturers would be required to use accredited conformity assessment bodies or bodies designed by regulatory bodies.

Manufacturers are then responsible for providing evidence to demonstrate conformity to regulation at their own cost. Such evidence would be in the form of test reports, inspection reports and certifications as stipulated in regulations and obtained from accredited or designated bodies.

Adoption of such systems reduced the burden on the regulatory bodies and the Government to provide resources for implementation of regulations. These systems have proved more effective in implementing the required standards and regulations and have been adopted in many other countries.

Voluntary systems

Apart from regulatory systems, market access and fair trading is facilitated by voluntary systems based on standards. Standards represent the needs and the expectations of consumers and users which are translated into form of specific requirements in standards.

This allows the manufacturers to make declarations in the market place based on standards and established conformity assessment and certification procedures.

These systems facilitate market access, comparability and competition on equal terms. In the operation of voluntary systems provisions and other protocols are required for protection of consumer from deceptive and misleading claims and bogus certification.

The use of accredited laboratories, inspection bodies and certification bodies and mechanisms for verification of authenticity of certification and reports by the regulatory bodies could effectively look after these aspects.

Thus the effectiveness of public safety and consumer protection activities under regulatory or voluntary systems depend on the adoption of appropriate implementation procedures and on the availability of effective and efficient mechanisms for assessment of conformity of products and processes to relevant stipulated requirements.

Conformity assessment activities that include testing, inspection and certification, for voluntary or mandatory systems, should be carried out by Conformity Assessment Bodies (Laboratories, Inspection Bodies, Certification Bodies) having necessary competence to carry out such tasks.

Outsourcing conformity assessments

Governmental and Statutory Bodies have been established for defined purposes and objectives which are empowered by law and with authoritative powers to monitor and control related activities in the country.

In some cases testing, inspection and certification arms have been established with own officials/ inspectorate trained for this purpose. In many situations the implementation of regulations has not been effective due to resource constraints and system inefficiencies. Decision making and implementation of regulatory requirements based on the assessments and recommendations of such system become weak and ineffective.

The practice of taking decisions based on internal inspection units and Laboratories have been gradually replaced by systems based on independent third party inspection bodies and test houses. In the global scenario, in many developed countries, testing, inspection and certification required for regulatory purposes (by the regular) are carried out by accredited bodies with demonstrated competencies and reliability.

These systems provide a means for the effective co-ordination and wider participation of all stakeholders in consumer protection and public safety assurance activities. The use of accredited bodies with third party assurance provides an effective means for assuring reliability and credibility of testing, inspection and certification activities with demonstrated skills and competence.

A number of organisations both in public sector and private sector could provide services supporting consumer protection and quality assurance activities. These agencies have the necessary resources and competence to provide testing, inspection, monitoring and certification services to support regulatory activities.

However, due to lack of co-ordination, the available resources have not been made use of in an effective manner by regulatory bodies to assure Safety and Quality of products and Services to the Consumer Public.

Co-ordination of Consumer protection activities

The strategies adopted by regulatory authorities in assuring compliance to stipulated requirements may cover;

(a) Pre-market supervision, approval, certification or registration systems. (Covering products, processes and managements systems)

(b) Post-market surveillance, monitoring and control systems.

(c) Supervision and Monitoring of facilities, processes and systems in the provision of services.

In all of the above activity areas accredited conformity assessment bodies in the State or private sector could be used by regulatory authorities in the implementation of regulations. These conformity assessment procedures facilitated and supported through accreditation provides a framework for greater co-ordination among regulatory authorities and other agencies offering technical services.

The protocols and mechanisms for implementation of regulations should make provisions for outsourcing and use of accredited CAB’s for such purposes. It may be necessary to update and amend the relevant regulations making provisions for the use of such agencies in the implementation of regulation.

Such conformity assessment procedures with accreditation systems have been used effectively in many countries throughout the world. These systems have been proved to be more efficient, transparent and less prone to corruption.

These systems also provide a means for more effective use of available resources (testing and inspection capacities) at national level for implementation of regulations. It is necessary for the Regulatory Authorities, Conformity Assessment Bodies and the SLAB to co-ordinate activities in a structured framework to assure public safety and protection of consumers at the highest level.

Sanath P. Mendis,
Director/ CEO,
Sri Lanka Accreditation
Board for Conformity Assessment

Key concepts of Consumer

Education- (Part 4)

This article reviews the following concepts:

* Why Good Business Ethics are important for a business?

* How to recognize an ethical business

* Code of conduct of a business

* Government’s role in promoting ethical business in the country.

Why good business ethics are important for a business?

All the entrepreneurs who engaged in business are also consumes in the other end. Even though they do business as a livelihood invariably they also part and parcel of the consumer community.

If the businessmen adopt good business practices then their consumers will satisfy with the products and services of that company. These delighted consumers will pass on their positive experience with regard to the product/service with their friends and this “word of mouth” will definitely contribute to improve the sales and profits of the company.

The main objective of a business is to serve the consumers. Actually the profit has to be considered as a by product of this process of serving consumers and not as a main objective.

But unfortunately, some businessmen think that the profit is their main objective and give a less priority to serve their consumers with the best products/services. These businesses can be successful in short term but in long term they will understand they have not identified their priorities correctly.

The practice of good business ethics improves the consumer relations with the company. The feed back of consumers can be very useful for a company to improve their products/services further. A delighted consumer is an invaluable asset for business. Adopting good business ethics will definitely help company to have a set of satisfied, loyal consumers.

How to recognize an ethical business

It is possible to identify five important characteristics of an ethical business.

A lawful Business

Ethical business always engaged in a lawful business. It supplies the needs/wants of the society for a reasonable profit. Ethical business doesn’t exploit the consumer by any means.

Honesty

An ethical business provides good/services to the consumers in a responsible manner. They do not mislead/deceive the consumer. Because they know at the end of the day they also become consumers and like to receive goods and services in a responsible and honest manner.

Engaged in safe, least polluting production processes.

An ethical business does not produce hazardous, substandard and goods with unacceptable quality. They always ensure the product safety for the consumers. Moreover they care about the environment and resources they use in their productions. They use environmentally friendly production methods to minimize the pollution of the natural environment. They identify protecting the environment as a social responsibility.

Take care of the employees, shareholders and society as a whole

Ethical business always ensures the growth and development of their employees. They are concerned about the welfare of them. They are concerned on the interest of the shareholders. They ensure honesty and transparency in all dealings.

Contributes to sustainable development

Ethical business contributes to sustainable development, social well-being and contributes to improve the quality of life of people.

Code of Conduct of a business

Code of conduct of an ethical business can be identified as follows: Business should

- Recognize, accept and adopt the rights of consumers

- Conduct truthful, non deceptive and ethnical business

- Not engaged in misleading and fraudulent practices

- Practise fair competition

- Must be responsible to the society

Government’s role in promoting ethical business in the country

The Government can play an important role in ensuring and promoting ethical business in the country. It is possible to identify eight ways that the government can promote and ensure ethical business.

1. Ensure product safety

The relevant authorities have to encourage the adoption of appropriate measures and must enforce the provisions in the consumer law in order to ensure the product safety. They must promote the adoption of national and international standard, voluntary standards, accreditation, good manufacturing practices; good house keeping practices etc to improve the safety of the products goes to the consumer

2. Ensure consumer satisfaction

The Government must adopt a policy that the manufacturer/trader has the responsibility to prove that their products meet the required standards. They are responsible for the durability, reliability and safety of their products. If a consumer is dissatisfied with a product there must be an effective mechanism to grant redress to the consumer.

3. Ensure hazard warning

The authorities must have an effective mechanism to identify hazardous products and take action to remove those from the market within a short period of time. Further more, if a product is found to be defective it must be recalled, replaced or substituted with another suitable product by the manufacturer, distributor or a trader.

4. Encourage fair competition

The Government has to encourage competition among business enterprises in order to make available product/services of a higher quality at reasonable low prices.

5. Reliable after sale service

There must be a reliable after sale service for the products available in the market. The conditions mentioned in the warranty/guarantee cards must be fair by the consumers.

6. Ensure fair contract deals

Consumers must be protected from the contractual abuses by the manufacturers/dealers. This includes exclusion of essential rights of the consumers.

7. Provide testing facilities

The Government has to encourage and ensure the availability of facilities to test and certify the safety, quality and performance of essential consumer goods and services.

8. Ensure the availability of redress mechanism

The Government has to ensure the availability of effective legal and administrative arrangements for the consumers to forward their complaints and obtain a fair redress to the consumer problems.

-Chandrika Thilakaratne,
Director, Consumer Affairs and Information, CAA

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Wholesale prices of essential commodities for August, 2007

Commodities Maximum wholesale price

White sugar Rs. 46.50

Big onions Rs. 48

Red onions Rs. 60

Potatoes (Pakistan) Rs. 45

Dried chilies Rs. 170

Green moong Rs. 105 (normal) Rs. 110 (superior)

Chic Peas Rs. 100 (normal) Rs. 115 (superior)

Canned fish Rs. 85 (per 425g tin)

Red splits lentils Rs. 93 (Paradise) Rs. 98 (Turkey)

Yellow split peas Rs. 67

Questions and answers

01. Q. If a swimming pool erected at a hotel premises starts to leak due to improper lying of tiles?

A As per the agreement signed between the two parties the company has the responsibility to redo the work to the entire satisfaction of the customer.

02. Q A written authority is transferred to an agent with specified rules and regulations by a company which manufactures confectionery and as per the rules and regulations the agent tries to hand over the items expired to the company which is refused.

A The company has to comply with the rules and regulations set out in the agreement.

03. Q If a customer finds that oil filled into his vehicle is diluted with some foreign materials, what can he do?

A He can make a written complaint either to the Ceylon Petroleum Corporation or the Consumer Affairs Authority.

04. Q If a customer has certain doubt with regard to the meter of a filling station when pumping oil to a vehicle, what measures he can take against the filling station.

A This can he brought to the attention of Department of Measurements Units, Standard and Services, Ceylon Petroleum Corporation and further to the Consumer Affairs Authority.

05. QWho has the Authority to look into complaints with regard to disputes in bottled drinking water?

A 1. Consumer Affairs Authority

2. Ministry of Health

3. Sri Lanka Standard and Institution regarding SLS certificate.

06. Q Is it sufficient to mark price of items imported from India only in their Rupees.

A The trader or the Importer has to display/ mark the prices converting into SriLankan Rupees.

07. QThe CDMA service given by a company is not up to the expected standard. Is the customer liable to take a refund of the money paid in this regard?

A These types of complaints can be directly forwarded to the Telecommunication Regulatory Commission of Sri Lanka which acts as the regulatory body to act on the matter.