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DateLine Sunday, 17 February 2008





Marriage Proposals
Government Gazette

Common man left with no other choice

Consumer Act exhaustive: lacks teeth

Recently in the United Kingdom, famous phone company "Car Phone Wherehouse" was fined nearly Euro 300,000 by the Regulator for misguiding the consumer on insuring mobile phones. Recently in the United Kingdom "I" mobile was introduced with revolutionary changes where one could buy the travel cards, conduct bank transactions, purchase daily needs and able to deal with most needs with the use of the mobile. In the West the way of life and economy is fast changing due to the development of mobile industry.

In Sri Lanka too mobile industry has eaten into the national and family economy. Consumer and media are always on the warpath on the increase of any consumer item. But ironically silent in arbitrary increase of prices and exploitation by mobile phone industry. It drains our economy and retards the development and education though there are indirect benefits at a high cost.

UK and Europe too is extremely concerned about this newly introduced monster. Car Phone Wherehouse was on the defensive when the media criticised the UK business giant on their attitude on the consumers on high pricing the new product and the insurance.

They had to give in to the pressure by the media and consumer organisations. They immediately brought down the price of the product and insurance. Consumer won the day due to their organisational ability and the support from the media as a whole.

This is not the first instance when multinational companies had to bow down to the consumer and media pressure.

A world famous Cola company infamous for the after effects and the ingredients of the product was found fault using water from "Thames River". In this instance too consumerorganisations and media clamped down on the company in the eyes of the public and law.

In England, Wales and Scotland consumerism is highest in the agenda.

Frequently asked questions, answers, assistance, and guidance to consumers are available in citizens advice bureaux and legal aid centres countrywide.

Times has "Times on Line" to help consumer online. City Regulators deal in various areas such as mortgages, vehicles, consumer goods, and essential items for the public and educating the public. In the United States the Federal Government has decentralised the consuer network giving high priority for the subject. In Europe ECC Networks, Websites, protective rules, and advertisements are keeping consumerism in the region active. In India Consumer Protection Act and Essential commodities act formulates policies, receive complaints, monitor prices, control essential commodities, and have a control on statutory bodies. In China Ministry of Consumer Affairs is active with the Motto - "Consumer Transaction with Confidence".

With global industrialisation and experts. China is giving top priority to quality and satisfaction of the consumer worldwide. In Singapore the Ministry of Domestic and Consumer Affairs have taken over the consumer activism from the airport to the entire country. Even airlines are not spared and the visitors to the country are educated on consumer rights and duties at the entry point to the country.

This is the situation in a nutshell in a few countries in different regions and economic policies. But the global phenomena on consumerism today are unique and demanding.

Our Consumer Act No 9 of 2003 was introduced on 17th March 2003 with the best of intentions, replacing Consumer Protection Act, Fair Trading Commission Act and the Control of Prices Act, with the change of the economic concepts of closed economy to open economy where the price control is replaced by price monitoring by regulatory powers. Under part 2 of the Act on Regulation of trade, the CAA became the main regulator in the country shelving price control into the history book.

Previously most consumer items were price controlled and it was a simple process. Under the present setup indirect price control has become a complicated process, where it has to be implemented under Section 18 of the CAA Act by declaring in the Gazette the named item as essential by the Minister on the advice of the CAA.

Under S/18 of the CAA only few items come under the scrutiny of the organisation. Gas, milk powder, cement and wheat flour are some items of which wheat has become controversial as to the legality of the implication of the directions which states that "No manufacturer or trader shall increase the retail or wholesale price of any goods or any services specified without the prior approval of the authority."

Our experience since 2003 has clearly shown the difficulties in implementing this mechanism, though the drafters have imported the concept from other jurisdictions to 'help' our consumers. It is time to reintroduce the price control concept again to meet the aspirations of the consumers and traders in the modern free economy and world economic order.

Who protects the consumer in Sri Lanka and what is the mechanism? CAA Act is exhaustive but lacks teeth and implementary powers. But using the available resources and raw materials, the authority is able to guide and assist the consumer which is defined as "actual or potential user of any goods or services made available for consideration by any trader or manufacturer".

The definition is broad and exhaustive. Every citizen including the "King" is a consumer in everyday life. Always the consumer is cheated and ruthlessly exploited mainly by the "giant traders".

In our country mostconsumer items are controlled by multinational giants. Wheat flour is controlled by one multinational company set up as a BOI in 1977 with the blessings of the government in power at the time. There is a sad history behind the transactions and currently public has to pay the price of the steps taken by the short sighted politicians at the time. Even today the company has the monopoly due to the power of money and facilities enjoyed over others.

No new player can take part in the business and industry due to obvious reasons. Consumer is used to consume wheat floor though it should be discouraged due to many reasons. CAA has taken the initiative to popularise rice based products and discourage consumption of wheat via consumer pages and continuous activism. It is heartening to note that the Ministry of Agriculture has taken up the challenge of popularisation of rice based and local food consumption instead of imported wheat floor which is not healthy and ruins our economy and health as well.

Gas industry too belong to the same category. 'That same' politicians of the past had entered into agreements with multinational companies, giving them monopoly and facilities in the monopolised industry. The gas terminals and all the infrastructure is in the hands of multinational industrialists thereby no new players can enter. These are only few examples of many unfortunate transactions and steps taken not in the best interest of the consumer, who is paying price.

Consumer Rights is a Human Right recognised and embodied in the Constitution of Sri Lanka and major UN instruments. Consumer Rights are recognised worldwide and vigorously implemented as an essential part of daily life. 15th of March this year is the World Consumer Day and consumerism is alive and active every second, worldwide.

The "Act" (CAA Act) states in S-8-(I) that "It is the duty of the authority to promote, assist and encourage the establishment of consumer organisations. Accordingly arrangements have been made to set up organisations at village, district and provincial levels with the help of governmental and non-governmental organisations backed by the consumer pages published every week in all the three media, educating the public of their rights and duties. CAA officers for the past two years worked hard to achieve this end and it is time to catalyse the trend with the help of existing network such as Samurdi Movement, youth centres, and organisations of grass roots level countrywide. Central consumer organisation is formed with the blessings of the CAA by inviting all the organisations in the country and it is time for the public to take part in this simple process. A group of members of the public may establish a consumer organisation which could be registered and recognised by the CAA through which the organisation too will become a part of the consumerism mechanism in the country.

For the consumer to be given the due place, they must be educated and organised. The Public (consumer) should be educated of their rights and duties as well.

The main vehicle to achieve this is the media, which is ever ready to take up the challenge. The media too should know their duties, mandate and limitations.

Very often "Media" takes up occasional 'sensational' cases to promote the media products rather than serving the public. CAA has taken up the challenge in publishing three consumer pages in three languages to educate and organise the public. Daily News consumer page published weekly for the last two years is read locally and internationally (via internet too) keeping us in par with international developments. This must be strengthened and organised.

The Tamil page is extremely popular in the North and East educating our people in all parts of the country for a better living, when the prices of consumer items are rising fast.

It is not only the consumer who should be educated and organised. Thegovernment, trader, con sumer and CAA must act together in achieving the objects.

Trader is broadly defined in the Act as one who sells or supplies goods wholesale or retail, import goods, and provide services of any kind. CAA has taken progressive and revolutionary steps conducting educational programmes all over the country guiding and educating traders, industrialists and manufacturers.

The programmes organised in Hatton, Nuwara Eliya, Maharagama, Kottawa, Tangalle and Kegalle have been a great success and brought funds, unity and understanding among the four key players mentioned above.

These projects are to be continued with vigour and strength as it is one of the main projects planned for the future of the organisation.

Judicial activism and Consumer Courts

Judicial activism and consumer organisation is the key for a successful consumerism as in India, where any aggrieved party has the right to seek redress from the Court. This writer mooted consumer Courts in Sri Lanka via the consumer pages of the media.

Currently CAA has to carry the full burden and the litigation is restrictive and complicated. Legal Aid is making genuine efforts in this field which needs assistance from the public.

Indian and Asian models are the best in my view with a mixture of the Austrian model with our own traditional system. Other proposition is to get the mediation boards to use as primary Courts. It is time for the active groups form a consortium with a defined object and plan of action with the help of all the main layers.

Alert consumer and just trader

Consumer should be educated and alert. CAA has a duty in implementing this challenge. Trader should be just. He must be educated and directed and there are ample provisions under "Regulation of Trade" to implement this concept for the consumer to be given the due place fully or partly.

Amongst other powers and duties Authority has power to study, issue directions to manufacturers in respect of price and marking, picketing of goods, prevent selling or offering to sell above marked price, determining standards and specifications relating to goods and supply of services, inquire into complaints, enter into agreements for maximum prices, prevent refusing to sell, prevent hoarding goods, refer matters to the Council for redress to consumers, compel traders to display prices, compel to issue receipts, prevent misleading and deceptive conduct, false representation and many other duties and powers statutory and otherwise.

Agreements under S14 of the Act

This is the most revolutionary and innovative introduction to launch a joint effort with the traders, industrialists manufacturers and traders in entering into long and short term agreements to maintain standards and specifications.

Gas, Milk food, and essential consumer items came under this scheme and implementation appear to be smooth and workable.

Consumer in Sri Lanka is not as powerful as their counterparts in the other parts of the world. But the situation is changing for good.

The people, media, Government and all players have now realised the need to work together in the interest of the consumer as a result of rise of cost of living and direct and indirect exploitation.

In the UK organisations and magazines such as "WHICH" are in the forefront in protecting the consumer and give him the due place. We understand that there is new and emerging consumer organisations countrywide.

There is a grave need for more and more consumer pages, magazines and periodicals.

It is time for the professionals and NGOs to enter into this most needed area to make our country a better place to live and to pave the way for the consumer to have consumer items and services of proper standards at a reasonable price.

With joint efforts of all the players namely the government, trader, industries, manufacturer, ministry, NGOs and professionals the consumer can be given the due place and "Crown" him in the near future.


Gamin Gamata - Presidential Community & Welfare Service
Ceylinco Banyan Villas

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