Traders face new duty to recall defective products

Businesses operating in South Africa have to be able to ensure the efficient and effective recall of unsafe consumer products from their clients and within their supply chains. This is a new requirement which stems from the Consumer Protection Act No. 68 of 2008. Guidelines for business (‘suppliers’) have been published and are open for comment until the end of the month. A supplier is the entity who has the primary responsibility for the supply of safe consumer products and ‘suppliers’ include manufacturers, importers, distributors and retailers. As importers are affected there is an international trade implication and South Africa will thus have a notification requirement of these regulations to the WTO’s Committee on Technical Barriers to Trade.

The Consumer Protection Act No 68 of 2008 was signed into law in April 2009, but the substantive and regulatory provisions only came into force in April 2011. The regulations pertaining to the Act have been finalised by the Minister of Trade and Industry and all companies have to comply with the Act. Failure to do so may result in disruption of business and possible penalties. The new Guidelines are created in terms of the provisions of Section 60 of the Consumer Protection Act and are developed and administered by the National Consumer Commission.

What does compliance involve? Well, unsafe products should not be available on the market and if they are there they can be voluntarily removed or removed upon instruction of the Commission. A voluntary recall occurs when the supplier initiates the recall and voluntarily takes action to remove the relevant goods from distribution, sale, and consumption. A voluntary recall may also be negotiated with a supplier by the Commission following enforcement or compliance action. The use of the word ‘voluntary’ does not correspond to whether or not the distribution network can choose to remove the product from sale when a recall occurs. All of the particular consumer products subject to the recall must be removed from the market place. On the instruction route Section 60(2) empowers the Commission to order a supplier to recall any goods which on reasonable grounds the Commission believes that those goods will or may be unsafe, or that there is a potential risk to the public from the continued use of or exposure to the goods, and the producer or importer of those goods has not taken any reasonable steps required and applicable. The Commission may require that the producer carries out a recall programme on any terms required by the Commission. These are known as ‘compulsory’ recalls.

The decision about the most appropriate action in order to reduce the risk to consumers will depend on a number of factors, including the nature of the risk and distribution and lifecycle of the product. What is clear is that this action will be a costly exercise for any business and should be conducted carefully in line with regulatory requirements so as to mitigate costs to the business.

Businesses wishing to obtain copies of the guidelines or assistance in commenting thereon are welcome to contact us for assistance.