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27 November 2008

The Minister of Trade and Industry (the dti), Mandisi Mpahlwa, says the Companies, Consumer Protection, and Competition Amendment Bills, will go a long way in improving the business regulatory environment in South Africa, which is conducive to ensuring productive economic activity. The three far-reaching bills, which are awaiting President Kgalema Motlanthe's signature before being recognised as acts of law, will also encourage competitiveness and ensure the sustainability of world-class norms and standards in the monitoring of consumer and corporate activities. Minister Mpahlwa was addressing a media briefing at the Union Buildings in Pretoria today.

"The Consumer Protection Bill seeks to create and promote an economic environment that supports and strengthens a culture of consumer rights and responsibilities. It also seeks to promote a fair, efficient and transparent marketplace for consumers and business," said Minister Mpahlwa.

He added that the primary purpose of the Bill was to prevent consumer harm and enhance the economic welfare of consumers in South Africa. To achieve this, the Bill adopts a rights-based approach, aimed at asserting consumer rights when transacting with suppliers. This approach is internationally recognised and based on the United Nations (UNs) adopted consumer rights regulations, which include the right to product safety and quality; fair and just contract terms; cancellation of consumer agreements and long-term contracts; buying bundled goods separately; receiving documents that are written in plain and understandable language; enhancing consumer choice by requiring disclosure and information with regards to prices; as well as the right to refunds and warranties.

Minister Mpahlwa said the need for a review of the existing company law regime was necessitated by amongst others, outdated company legislation; globalisation and the advent of democracy; the increasing scourge of company scandals; developments in the field of financial reporting standards; the need to ease the regulatory burden, especially for small businesses; increasing market transparency; and the simplification of company registration and maintenance.

"The Companies Bill is therefore aimed at overhauling the current Companies Act, 1973. It is the result of consultations with various stakeholders and has lasted a period of five years. The Bill is a complete overhaul of the old regime in this area of the law," said Mpahlwa.

In respect of the Competition Amendment Bill, Minister Mpahlwa said the Bill sought to promote better private sector market governance through greater compliance with the law and adoption of sound business ethics.

"This Bill introduces a criminal sanction regime against individuals found guilty of causing a firm to engage in price fixing, output restriction, market allocation and collusive tendering. A transgressor may face up to ten years' imprisonment or pay a fine of R500 000, or both. This severe penalty serves as a signal that cartel activities will not be tolerated, and those involved in this harmful practice will be severely punished," added Mpahlwa.

Minister Mpahlwa also informed the media that for the effective implementation of policy and law, it will be important for the dti, and other regulatory bodies, to continuously monitor compliance and provide adequate resources for enforcement.

To view the three bills, visit: http://www.thedti.gov.za/bills/bills.htm

For further information contact:
Sidwell Medupe
Cell: 073 522 6801
Tel: 012 394 1650
E-mail: Msmedupe@thedti.gov.za

Issued by: Department of Trade and Industry
27 November 2008