Market Investigation

The Division also conducts market investigations and raids with a view to nab errant traders who violate the provisions of the Consumer Affairs Authority Act with regard to regulation of trade. These market investigations are conducted by the Head Office and the network of District offices of the Consumer Affairs Authority and the traders who are nabbed for violating the provisions are prosecuted in the respective Magistrate's Courts.

To encourage the good business practices lawful business, CAA has introduced “Model Shop” concept and has developed a set of criteria which a business should fulfill in order to become a model shop. The CAA conducts awareness programs for the traders associations, chamber of commerce, and companies on the current consumer law and “Model Shop” concept in order to promote good business practices and safeguard consumer rights.

Types of Offences

• Removing, altering, obliterating, erasing or defacing of a label or description or price mark of any goods and producing such a good for sale.
• Violation of directions issued to manufacturers or traders in respect of labeling, price marking, packetting relative to manufacturing, importing, marketing, stoking, sale or manufacture of selling and stocking of goods or on any other conditions.
• Sale or offer to sell any goods above the marked price.
• Failure to comply with the standards and specifications relating to goods and services determined by the CAA.
• Manufacture or sale of any goods which does not conform to the warranty or guarantee given by the manufacturer or trader.
• Contravenes any provision of any written agreement enter in to with the Authority with any manufacturers or traders of goods provide for maximum price, the standard of any goods manufactured or any condition required on the manufacture.
• Refusing to sell goods in possession.
• Denial of goods in possession and imposing conditions on the consumer upon purchase.
• Keeping the goods in custody excess of normal trading requirements.
• Increase the price of any specified good or service without the prior written approval of the Authority.
• Fails or refuse to display the price list or price board in the place of business.
• Not issue or refuse to issue a bill or receipt when demand by the purchaser.
• Engaged in a conduct that is misleading or deceptive the consumer by trader or business.
• False representation that any goods or services are of a particular standard, quality or grade, or that goods are of a particular style or model, or that goods and services have sponsorship, approval, performance characteristics, accessories ,users or benefits that they do not have.
• Violation of conditions pledged in the warranty or guarantee by implication or otherwise on the supply of goods and services.
• Prevailing anti-competitive behaviors or monopoly situations.
• Failure to maintain records as required by the Authority or to furnish any information or to produce any documents to the Authority to discharge its duty.

Consumer Education

One of the main functions of the Authority is to promote consumer education with regard to good health, safety and security of consumers. Consumer Affairs Authority has identified several strategies in order to disseminate information to the consumers. In this context the Consumer Affairs and Information Division conducts workshops for different target groups such as government officials, school children and teachers, university students, community based organizations, consumer activists, housewives etc.

The Division encourages the establishment of Consumer Organizations at regional level which is one of the core functions of the Authority. The objective of the establishment of these Consumer Organizations is that consumers living in a particular area could voice their grievances on consumer issues through these organizations and also they could make their own consumer community aware of the consumer rights and responsibilities. Further, they can take initiative corrective action against to promote lawful business in their village/town through these Organizations. The main challenge faced currently is to design a strategy for the sustainability of these Organizations.

Currently CAA is working closely with the district administrative setup in order to identify strategies to establish to network of active consumer societies at grass root level.

Theme Article

Importance of consumer awareness

AN ALERT CONSUMER IS A SAFE CONSUMER!

“Consumers by definition include all citizens who are by and large the biggest group who are affected by almost all government, public or privet decisions.”

John F Kennedy
Former President of United States

In the market economy manufactures always try to maximize profits. There are lots of goods available in the market such as milk products, meat or fish products, genetically modified food products, fruits, soft drinks, edible oil etc. But unfortunately consumers do not know the ingredients of these products. Sometimes manufactures are not following safety regulations in the products like electrical equipment’s, cement, LPG cylinders, switches, sockets, batteries. This leads to many fatal accidents. Adulteration of food, artificially colored vegetables and fruits are very harmful to our health. Manufactures do not concern the quality of the goods and services. It is not important for them the impact on health of people and the environment. In a market economy producer who decides what the consumer should want. In other side consumers are misled by the advertising techniques. Consumption patterns are changing fast today. When we buy goods and services it is very important to check details before buying products. When we consider all above problems there must be an organized and systematic movement for safeguarding the interests of the consumers.

It is very important that the consumers are aware of their rights. In there the government has to play an important role, by enacting suitable laws and enforcing them effectively. In this point consumers have a major role. They must be aware of all rules and regulations regarding consumer protection. Because education is a lifelong process, consumer education is an important part of this process.

The most important step in consumer education is awareness of consumer rights, responsibilities and duties of consumers. Consumers must learn to obtain information about goods and services, understand the psychology of selling and adverting, learn to shop wisely and distinguish between wants and needs.

History of Consumer Law

BADULU TABLET INSCRIPTION BRINGS HISTORICAL TRUTH ON CONSUMER PROTECTION

While series of internationally accepted consumer rights were originated from America and though that primary truth was contained in Sri Lankan stone inscription written in 10th century, we might think that the said fact is not true. However, these facts were included in Badulu Dem inscription written in 10th century.

Once 4th King Udaya went to Mahiyangana Chaitiya pilgrimage and residents of Hopithigamuwa who came there held an agitation saying ‘trustees of kings’ shops, penalty leaders and their servants have collected penalty, due tax, bribe in contrary to Kings Law. Because of this agitation statute was brought saying ‘tax should not be collected as per the Decree of pre King Kasyapa era. This statute was inscribed in the Badulu Dem letter. Not only levy of tax, many important issues related to social life were contained here. Consumer Right is a special feature contained here.

Hopitigama commercial village in Sorabora area, closer to Mahiyangana was discovered. Badula Dem letter is more famous than the Sorabora Dem letter which is identified as Hopitigama Dem letter. John Baily, Assistant Agent, Badulla District in 1851 brought this Dem letter which was unprotected and subjected for rain and sun, is kept in a decorated pavilion near the Kachcheri, Badulla (present Peoples’ Bank premises), for public viewing. This is the largest Dem letter with small letters among those discovered in Sri Lanka. The special feature here is that the said Dem contains series of statute which brings much satisfaction to the public.

The stone measuring 8 feet and 5 inch with four sides A B C D has 47, 49, 49 and 58 lines on those sides respectively. It is shown in the below mentioned picture.

Dr. Senarath Paranawithana says that the issue stated here could be categorized into 4 main parts.

• Rules relating to penalty imposition
• Rules relating to Govt. officers
• Trading policy
• Consumer Rights

Letters were inscribed with line and each issue was presented separately while the final scripture is completed with symbols such as sun, moon, crow and dog. These symbols indicate that the said inscription will remain in force till the sun and moon exists and violators will be reincarnated as dogs and crows. Since they feared that they would be reborn as dogs and crows as retribution, they have not violated this statute as they believed that the violators would be punished.

Among issues embodied here, rules and regulations relating to consumer protection are as follows:

• Other measuring system than Govt. tax measuring system should not be used
• Injustice through unauthorized balance and weight (while stamping)
• Not to sell goods at unsuitable place
• Selling goods at places where business is not done
• Goods not to be sold should not be sold
• Keep betel and nut at pavilion for sale
• When found things are sold at unsuitable place, remove them by Govt. servants
• Take two fold tax to undeclared goods without any problem

these kinds of many issues were contained.

The above issues were taken into consideration when formulating accepted consumer rights at international level. The above issues were contained in the provision of Consumer Authority Act No. 9 of 2003. It is to say that enactment is made saying that betel and areca nut which have to be focused on consumers health concern, has to be marketed at pavilion. Betel and areca nut are popular among the public. Since they are instantly consumed it should be kept clean.

Similarly, the King’s era Decree says that usage of weight and measure which do not comply with required standard should be avoided. This rule is more modified in the present context through ‘Weight and Measure Ordinance’. The rule that says that ‘goods should not be kept at ‘unsuitable place and market them’ was further amended as per Public Nuisance Ordinance No.15 of 1862 which say ‘selling or prompting to sell food and drink which are unsuitable for consumption and become poisonous through consumption is a punishable offence.

The above statute which was inscribed on stone with Brahmiya letters at a primitive level in 10th century is now used to keep public life at a better level. While we have passed hundreds of years and come to the present era, various common issues existed in the King era are still prevalent. The Statute enacted in that era is still useful to the present time.

Reference Books:

1. Ven. Amarawansa Thero, Kotmale -1969 - Lakdiva Sel Letter - Gunasena and Co - Colombo
2. Ven. Wimalakeerthi Thero, Medauyangoda - 2004 - Sheela Record Journal - S Godage Brothers - Colombo

Consumer Rights & Responsibilities

• The right to satisfaction of basic needs
  To have access to basic essential goods and services: adequate food, clothing, shelter, health care, education, public utilities, water and sanitation.
• The right to safety
  To be protected, production against products, processes and services which are hazardous to health or life
• The right to be informed
  To get information to make informed choice, and to be protected against dishonest of mislead advertising and labeling
• The right to choose
  To be able to select from a range of products and services, offered at competitive prices with an assurance of satisfactory quality.
• The right to be heard
  To have consumer interests represented in formulating and execution of government policy, and in the development of products and services
• The right to redress
  To receive a fair settlement of just claims including compensation for misrepresentation, substandard goods or unsatisfactory services
• The right to consumer education
  To acquire knowledge and skills needed to make informed, confident choices about goods and services, while being aware of basic consumer rights and responsibilities and how to act on them
• The right to a healthy environment
  To live and work in an environment which is non-threatening to the well-being of present and future generations

CONSUMER AFFAIRS AUTHORITY
ACT, NO.9 OF 2003
PART 111
PROMOTION OF COMPETITION AND CONSUMER INTEREST

• Clause 34.
  1. The authority may either of its own motion or on a complaint or request made to it by any person, any organization of consumers or an association of traders. Carry out an investigation with respect to the prevalence of any anti-competitive practices.
  2. It shall be the duty of the Authority to complete an investigation under subsection (1) within one hundred days of its initiation.
• Clause 35.
  For the purpose of section 34, an anti-competitive practice shall be deemed to prevail, where a person in the course of business, pursues a course of conduct which of itself or when taken together with a course of conduct pursued by person associated with him, has or is intended to have or is likely to have the effect of restricting, distorting or preventing competition in connection with the production, supply or acquisition of goods in Sri Lanka or the supply or securing of services in Sri Lanka.
• Consumer Affairs Authority is empowered by Section 34 of the Act No. 09 of 2003 to carry out investigation with respect to the prevalence of anti- competitive practice.
  The CAA invites representations where a person in the course of business, pursues a course of conduct which of itself or when taken together with a course of conduct pursued by persons associated with him, has or is intended to have or is likely to have the effect of restricting, distorting or preventing competition in connection with the production, supply or acquisition of goods in Sri Lanka or the supply or securing of services in Sri Lanka .Where the anti competition situation in question may operate against the public interest, any association, business concern or person interested may make representations in this connection to the CAA.

Anti-Competitive Practices

Procedure adopted by the Authority in handling a Complaint on Anti-Competitive Practices

Where the application is made to the Council as the case may be, it shall be the duty of the Council to make its order in respect of anti-competitive practices on the parties concerned for the termination of such anti-competitive practices if it is against the PUBLIC INTEREST on such application after an inquiry. For the purpose of investigations the Authority has the powers of a District Court.

Any item of goods or services, which is considered as essential to the life of the community, may be “specified” as an essential commodity by the Hon.Minister In charge of the subject of Consumer Affairs Authority, acting under Section 18 of the Act, and an order to that effect would be published in the gazette of the Government of Sri Lanka Prescribing such item as a specified item. Once an item is gazette manufactures or traders shall not increase the price 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 for any price revision and convey the decision to the applicant company.

The examination of the cost structure pertaining to an application for a price revision of a ”specified” commodity, by making reference to supportive documentary evidence furnished by the applicant, and making recommendations to the Authority is the main function of the pricing & management division. This division is also consulted prior to introducing fiscal measures, like import duty changes, subsidies, rebates, etc. with a view to reducing prices or retain them at current levels, whenever prices are likely to escalate due to supply and demand forces.

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. The objective in examining a price is to ensure that prices are not increased indiscriminately. The final objective of the pricing & management division for fair pricing to prevail by fostering competition is a guiding factor in the price determination of essential commodities.

The division is responsible to study and purpose prices for essential commodities and to make recommendations to the authority on pricing policies. The division is also required to recommend prices when entering in to agreements with manufactures and traders in terms of section 14 of the act after studying the production patterns, price trends, market conditions, International prices etc. undertaking public and private sector efficiency studies is also one of the functions of the division.

A manufacture or trader who seeks to obtain the approval of the authority shall make an application in that behalf to the authority.

Pricing Mechanism

Powers vested to the authority by CAA act no.09 of 2003, for regulating the pricing mechanism

The Compliance & Enforcement division is the legal arm of the authority & is mainly responsible for the enforcement of the provisions of the Consumer Affairs Authority Act no.09 of 2003 some of the functions of the division are given below.

• Conducting of inquiries on consumer complaints in terms of sections 13(3) and 32(4) of the act and the enforcement of orders issued in respect of such inquiries through the judiciary.
• Institution of action in courts and prosecution of offenders for the contravention of the provisions of provisions of the act and depending the Authority in courts on cases instituted against the Authority.
• Preparation, Execution, and enforcement of agreements on behalf of the Authority as per the provisions of the Act.
• Drafting and publishing of directions and orders in the government Gazette in terms of the provisions of the Act.
• Preparation and issuing of Warnings to Traders in terms of the provisions of the Act in the case of first contravention of the provisions.
• Monitoring of substandard goods entering the country with the assistance of the SLSI and Sri Lanka Customs.
• Organize and conduct legal educational programs for the operational staff in order to enhance their knowledge & participation as resource persons on educational/awareness programs for both consumers and traders conducted by the Authority and Other Organizations.

Apart from the day to day activities, the division is responsible for drafting and preparation of proposals to amend the existing provisions in the act in order to enhance powers of the Authority and to minimize the barriers in the implementations of provisions. In achieving this task the division is involved in obtaining proposals, drafting and liaising with the respective Departments [Attorney General’s Department and the legal Draftsman’s Department] in sorting out varies issues.

The consumer complaints unit [CCU] attached to this division is responsible for the following;

• Handing of consumer complaints including the negotiations for settlements with a view of granting redress to the aggrieved complaints in a manner acceptable to both parties.
• Coordinate with other Regulatory bodies in obtaining redress for aggrieved consumers, especially in respect of services.