LAW RELATING TO CONSUMER PROTECTION IN SRI LANKA

By Maxwell start from slide 6

•  Consumer protection legislation in Sri Lanka can be traced back to the onset of the 2nd World War, an era of scarcities in essential food commodities that paved the way to pass the first ever legislation for food and price control.

• These regulations were meant to implement a rationing scheme of distribution of staple food items, basically rice and wheat flour and to control prices of such items.

• They continued to be in force until 1950 in which year both the Price Control Act and the Food Control Act were passed.

• Thereafter, different legislations were passed to regulate the market prices of essential commodities until the implementation of the ‘Free Open Market Competitive Economic Policy” in 1977.  

  

• Enactment of the Industrial Promotions Act caused the removal of most items under price control.

• The Consumer Protection Act of 1979 was the first legislation, which attempted to lay down Consumer Rights while enforcing penal provisions against offenders and to provide redress and compensation to aggrieved consumers.

• The provisions of the Consumer Protection Act were implemented by the Internal Trade Department.

• In 1987 the Fair Trading Commission was established under the Fair Trading Commission Act No.1 of 1987.

• The mandate of the Fair Trading Commission was to deal with monopolies, merges and other anti-competitive practices while regulating the movement of prices of selected goods.

Current Law as to Consumer Protection in Sri lanka•  The Consumer Affairs Authority Act No 9 of

2003 repealed three former legislations namely; the Consumer Protection Act of 1979, the Fair Trading Commission Act of 1987 and the Control of Prices Act of 1950.

• Therefore, Consumer Affairs Authority is the successor to the former Internal Trade Department as well as the former Fair Trading Commission. .

• The Act has created two institutions, Consumer Affairs Authority and Consumer Affairs Council to deal with matters relating to Consumer Affairs

Authority and Council

Authority- The Authority consists of a Chairman and not less than ten members appointed by the Minister in charge of the subject

Authority is the main institution that operates under the Act

Council- Three members appointed by the Minister in charge of the subject forms the Council. Administratively it functions under the Authority.

It has wide powers to determine matters referred to it by the Authority, mainly in the anti competitive areas.

Further it could investigate anything referred to it by Authority and can make recommendations to Authority. E.g.. On price of a product

Consumer Affairs Authority ( CAA) Consumer Affairs Authority ( CAA) is

vested with wide powers from an overall supervisory power to regulate trade, enter into written agreements with manufacturers

It is vested with the power of the District Court in determining Consumer Complaints.

Objectives of the Authority

1. To protect consumer against marketing of goods and services which are hazardous to life and property

2. To protect consumers against unfair trade practices and guarantee the consumers’ interest shall be given due consideration

3. To ensure that wherever possible consumers have access to goods and services at competitive prices

4. To seek redress against unfair trade practices, restrictive trade practices or any other forms of exploitation of consumers by traders.

• Powers Of The Authority In Regulation  of Internal Trade

A. Price marking, labeling and other issues

•  01.  The Authority may issue general directions on labeling , price marking, packaging, manufacture and sale of any goods [ Section 10]

• ( Any person who does not comply with or changes any label, pricing or packing etc shall be guilty of an offence )

•

• 02. The Authority can enter into a written agreement with a manufacturer or supplier who sells goods as to the maximum price that goods can be sold and to provide other conditions such as manufacture, supply, storage, transport, distribution, marketing, labeling etc. ( sec 14)

• 03. Authority either of its own motion or on representations made to it by any other may review any question to the price of any goods or the charge for any service and thereafter report to the Minister.

• 04. Authority has made it compulsory for every trader to exhibit a notice notifying the maximum retail price or wholesale price of the goods available for sale on the products other than the price is marked on the goods itself. ( sec 26)

• 05. As per the sec 28 of the Act, every trader who sells any goods shall on demand issue to the purchaser a receipt setting out – Date of the sale– The quantity of the goods sold– The price paid – Whether the sale was wholesale or retail– Any other spec imposed under any law

• B. Determining the Standards and specifications relating to goods and services

01. The Authority may, for the purpose of protecting the consumer, determine the standards necessary to ensure the quality of goods and services [ Section 12 ]

• ( CAA has given directions to L.P. Gas industry comply with the Standards set by Sri Lanka Standards Institute as regards filling , refilling and selling of gas cylinders)

• 02 . CAA , under sec 10 can direct any manufacturer or trader to mark the maximum retail price, batch number, expiry date on the product .

• (As such it has directed , Flour and sugar sold in packs, soap, laundry powder, baby products, confectionaries such as cakes and sweets sold in packs or containers, toothpaste, batteries, bread sold in packs, dry fish and maldive fish in packs, cheese sold in packs or containers, eggs sold in packs, bottled water and many other items to have such details as prescribed)

• 03. Under sec 15 of the Act, it prohibit traders to refuse to sell goods or conceal goods meant for sale.

• ( this will have effect on where goods becomes scares or impending price increase)

• C. Specific Goods• The Authority may determine the “Specific Goods” which is

essential for the living and place such goods under price regulation for the well being of consumers. [ Section 18 ]

• Any item of goods or services may be “specified” as an essential commodity by the Hon. Minister of Trade, Commerce & Consumer Affairs in consultation with the Consumer Affairs Authority, acting under Section 18 of the Act. E.g.. LP Gas

• Once an item is gazette, no importer, manufacturer or trader can increase the price of such product without the prior written approval of the Authority.

• A period of 30 days is provided for the Authority to examine the application and convey the decision to the company.

 

• The Authority examines the cost structure pertaining to an application for a price revision by making reference to supportive documentary evidence furnished by the applicant, and makes recommendations to the Board of the Authority. ( cost structure format is given)

• The objective in examining a price is to ensure that prices are not increased indiscriminately.

• The prices approved by the Authority for any particular product may vary from brand to brand, which leaves each brand identity undisturbed depending on the special distinguishing features of a brand and the company’s marketing strategies.

Ability of public to complain Any member of the public, any association of persons

or any organisation can complain the CAA about a product or service provided at an excessive price.

Counterfeit products/ sold with misleading/ low quality or any other matter

Further Minister or Authority on its own motion can investigate and intervene on a price matter of goods or service

( for further details, please visit Sri Lanka’s Consumer Affairs Authority’s Website. It has a wealth of information)

Other laws and Institutions for consumer Protection in Sri Lanka

• 1. Food Act No 26 of 1980• 2. Cosmetic Devices & Drugs Act No 27 of 1980• 3. Sri Lanka Standards Institution• 4. National Environment Act• 5. Code of Intellectual Property Act No 52 of 1979• 6. Public Utilities Commission• 7. Telecommunications Regulatory Commission• 8. Department of Weights and Measures• 9. Insurance Board of Sri Lanka• 10. Central Bank of Sri Lanka ( monetary Board)• 11. Unfair Contract Terms Act. • 12. Electronic Transactions Act No 19 of 2009 13. Payment Devices Frauds Act No 30 of 2006

Always try to give the best to the consumer!