The Consumer Protection Act - a heads up

The Consumer Protection Act - a heads up

The President of South African signed the Consumer Protection Act on 24 April 2009 and it was published in the government gazette on 29 April 2009. The official statement made by the Department of Trade and Industry is worth reading. Many people still incorrectly refer to it as the Consumer Protection Bill rather than as the Consumer Protection Act. A Bill is a draft Act that has not yet been enacted.

What the Labour Relations Act did for employees, the Customer Protection Act will do for consumers

So what does the Consumer Protection Act mean for you?

Visit these links:
http://www.michalsons.com/the-consumer-protection-act-a-heads-up/1382/print/
http://entecom.co.za/brochures/Consumer%20Protection%20Act.pdf
http://www.saflii.org/za/legis/num_act/cpa2008246.pdf

THE CONSUMER PROTECTION BILL: . http://www.dti.gov.za/parlimentary/bills/ConsumerProtectionBill.pdf

 

Consumer Protection Act made easy

Most South African businesses seem to be unaware that the most draconian of the provisions of the new Consumer Protection Act will soon be coming into effect, said consumer law specialist Neville Melville at the launch of his latest book, The Consumer Protection Act made easy. "Hidden away at the back of the Act* is a provision that states that Section 61 applies to any goods supplied on or after the 'early effective date', which is one year after the Act was signed, namely 24 April 2010," said Melville. In terms of Section 61, a producer, importer, distributor or retailer of goods is liable to a consumer on a no-fault basis for harm, including death, injury, physical damage or associated economic loss, which was caused by unsafe or defective goods.

The Act will have a significant impact on the way business is conducted in South Africa. Melville recommended that all suppliers covered by the Act, which will applying to virtually every business transaction and to manufacturers, retailers, professional service providers, franchises, NGOs, trade unions and municipalities, start preparing for its implementation without delay.

A website, http://www.consumerprotectionactmadeasy.co.za/  has been set up as a one-stop-shop to assist them in doing so.The Consumer Protection Act made easy extracts the essence of Act and rearranges the sections into a more user friendly order, making it easier to navigate through the Act, with the bulk of the provisions coming into effect on 25 October 2010. According to Melville, it is no longer a world where the buyer needs to beware, but rather the seller.

Ethical Textiles A 2010 Report

The Rupp Report: Ethics In Garment Production

Jürg Rupp, Executive Editor

In recent years, ecological standards in the whole textile production chain are not only a green idea, but a prerequisite to be successful. Many nongovernmental organizations (NGOs) are carefully monitoring big global retail chains and their activities, especially regarding toys and textiles.

Global Organic Textile Standard

In the monitoring spotlight are chemical inputs such as dyestuffs and auxiliaries, which must meet certain environmental and toxicological criteria; also, the choice of accessories is limited under ecological considerations. The Global Organic Textile Standard (GOTS) is recognized as one of the leading processing standards worldwide for textiles made using organic fibers. It defines high-level environmental criteria along the entire supply chain for organic textiles and requires compliance with social criteria as well. Currently, more than 2,000 enterprises worldwide are labeled.

Social Criteria ...

Not only are the ecological standards in the focus of attention, but also, the social criteria in a textile's production are very much in question. Since the world -- mainly, the West -- is not willing to pay a decent price for a decent product anymore, most production of fabrics and garments has moved to the Far East. And the prices are under constant pressure because big department stores discovered textiles to be a cornerstone of their turnover.

In Europe, for instance, retail chains like Aldi and Lidl are selling big quantities of very cheap textiles. Even coffee-shop chains such as Tschibo are selling textile products in the same places where they sell coffee. The sourcing power of these enterprises is very strong, and the suppliers are suffering. As raw material prices are the same all over the world, labor costs are still one of the key components to save money and, therefore, put pressure on the working environment and wages. And now, apparel production has begun in one of the poorest countries in the Asia-Pacific region -- Bangladesh.

... And Social Responsibility ...

Since consumer organizations began putting a lot of emphasis on social responsibility, the issue has become delicate: Many big retail chains already had signed papers to source their products in Asia, where the employees are working in a controlled social environment. Also in the GOTS standard, social responsibility is an important criterion for the label. The wages must secure a decent life and there should be no discrimination; and safe working conditions and no child labor must be guaranteed as well. These terms are primarily important in so-called risk countries.

... Are Not Compatible With Cheap Products

And this criterion is not only wishful thinking, but also a fact. The German retail chain Lidl has come under pressure after NGOs published reports that some of Lidl's contractors are not working in accordance with their customer's commitment that "Lidl makes a large and important contribution for the lasting improvement in the working conditions, primarily in the developing and emerging countries."

However, the Berlin-based human rights organization European Center for Constitutional and Humans Rights (ECCHR) and the Clean Clothes Campaign network examined several Lidl subcontractors in Bangladesh. The results are alarming: The employees, predominantly women, complain that they must do overtime regularly, and this overtime often is not paid. The salaries -- some 30 euros per month -- usually represent the local minimum wages. Employees would be punished with deductions from salary again and again, and also when they refuse to work overtime.

The consumer advice center in Hamburg, Germany, accused Lidl of misleading its customers. The German retailer responded that since 2006, Lidl itself has checked the working conditions of the subcontractors through 7,500 examinations and 28,000 further examinations by external testing institutes. However, the result was that that "some necessary improvement measures in the areas of the wages and the worker's security should be made," and Lidl is accused of checking only "very selectively" its subcontractors. The end of the story is yet to come.

April 13, 2010
Ref: Textile World

US textile sector set to grow

Research indicates that the US textile sector looks set to grow. Can our own textile sector take lessons from the US?

Textiles 2010: A Light At The End Of The Tunnel

Continuing capital investment, improved logistics, among other factors, are helping to set the stage for an improving economic climate.

I t's beginning to look a bit brighter for the hard-pressed U.S. textile and apparel industries. Activity is no longer in free fall -- and, more importantly, the new year is promising continuing improvement.

To be sure, the huge slippages of 2008 and 2009 -- the biggest since the Great Depression -- won't be recouped. In fact, it may be difficult to avoid additional fractional losses over the next few quarters. But, by late in the year or in early 2011, domestic textile and apparel firms could well be sporting some scattered gains.

More importantly, this appraisal is based on more than just wishful thinking. An already improving macroeconomic trend -- with gross domestic product expected to increase 2 to 3 percent this year -- is bound to have some positive impact. Other things being equal, a rising business curve should mean rising incomes and hopefully a concomitant advance in textile and apparel activity.

Equally encouraging: Both textile and apparel firms have managed to weather the recession in tolerably good financial shape. If there's any doubt on this score, take a look at their earnings reports. True, last year's operating profits dropped a fair amount. Nevertheless, mills for the most part have managed to avoid some of the catastrophic losses experienced by many other industries.

Key factors behind this better-than-might-have-been-expected bottom-line performance are the host of innovative steps taken to maintain and strengthen positions in today's hotly competitive marketplace. Companies are making great strides in reinventing themselves -- putting more and more emphasis on raising standards, introducing more improved and new products, and anticipating consumer needs.

To help accomplish these industry targets, mills are continuing to invest in new plants and equipment, despite today's financial restraints. As one company CEO recently put it: "That's the only way to survive. We just can't afford to ignore the latest improvements in productivity and quality."

Still another hopeful sign: Growing realization by Washington lawmakers that more has to be done to level the international playing field. Some halting steps already have been taken, and more are contemplated.

Click here for the full report
By: Robert S. Reichard, Economics Editor-Textile World
Jan/Feb 2010

Do SA retailers support non-compliant apparel manufacturers?

According to this report from The Swazi Observer, it is alleged that Woolworths has apparel suppliers that are not compliant.

Local factory in Woolworths ‘fiasco’

16 April, 2010

By Mthunzi Maziya

The Swazi Observer

A clothing supplier, which has supplied Woolworths for 32 years, says it was stunned by the retailer’s decision to cancel its contract in favour of a competitor that may not be trade compliant. The trader in question is Junit Manufacturing, a factory based in the country but has South African ownership. A report on Fin24.com states that Sterling Clothing, which supplied Woolworths with men’s casual wear, including chino pants, says it was astonished when its contract was cancelled by Woolworths.

“The decision had nothing to do with pricing or the quality of the merchandise we supplied. What makes it all seem completely bizarre is that, by its (Woolworths’) own admission, it has absolutely no problem with us in terms of service, delivery or quality,” said Sterling’s Bruno Desmet. In response, Woolworths’ Brett Kaplain told the website that in line with the demands of modern retail, Woolworths processes are reviewed from time to time, including sourcing opportunities. “In this instance, an existing local supplier offered us a wider catalogue and a more compelling proposition overall,” he said.

He added that although the new supplier was a South African registered company (Junit Manufacturing), it made its merchandise in factories in neighbouring Swaziland. “By non-compliant, we mean it is not part of any formal association or trade body representing the clothing and textile industry of South Africa and, accordingly, it is not paying the required or prescribed wage rate.”

Woolworths’ decision to source merchandise from the Swaziland-based supplier, while South African manufactures were struggling, says Desmet, would exacerbate unemployment in the SA’s clothing and textile industry. Meanwhile, Kaplan said Woolworths’ operates a tightly integrated network of suppliers to ensure exacting standards. “Conformance with Woolworths’ code of business principles is a prerequisite for suppliers,” he said.

dti to target false 'Made in SA' labels

By Florence de Vries

Two JSE-listed clothing retailers and various smaller apparel groups may have violated apparel label regulations, but the Department of Trade and Industry (dti) is preparing to launch a task team next month to address this problem.

Recently Durban-based clothing and textile researcher Renato Palmi inspected a range of garments at Young Designers Emporium (YDE), a subsidiary of Truworths, and found that "very few of the garments bore country of origin labels".

Palmi said that "Made in SA" labels were evident but the source of the fabric or whether the textiles used were local or imported could not be verified. Palmi said he had similar findings at fashion retailer Mr Price, also a large importer of garments and fabrics from east Asia, as well as The Platinum Group subsidiary Vertigo.

"In 2008, the government announced that goods must be labelled in terms of their country of origin, as part of the Merchandise Marks Act," he said. According to the regulations, all items of merchandise are required to bear a label indicating the country of origin, whether imported textiles were used to make them, the fibre content and care instructions.

To ensure compliance, the Department of Trade and Industry and the SA Revenue Service carry out inspections at retail outlets and if apparel does not meet the label regulations, companies face fines of R5 000 per item or imprisonment for three years, or both.

Alastair McArthur, the chief executive of Mr Price, said the company distinguished between what was made in South Africa and what was made elsewhere. "With regard to these findings, we would need an SKU (bar code) number to verify this case," he said. According to McArthur, the company sources most of its fabric from elsewhere as the kinds of fabric it needs are not available locally.

Truworths responded that YDE operated under a different business model from the company's other stores, such as Uzzi and Identity. "The independent designers are contractually bound to adhere to labelling regulations. YDE store staff are tasked with attempting to ensure these regulations are adhered to... however, it is difficult to implement with 100 percent certainty given the volumes involved."

JSE-listed Truworths said about 95 percent of the garments were produced locally, while most of the fabrics were imported. Vertigo had not commented at the time of going to press.

Etienne Vlok, a senior researcher at the Southern African Clothing and Textile Workers' Union (Sactwu), said proper enforcement for these infringements was pivotal as Sactwu had found a strong correlation between non-compliance with country of origin labelling and customs fraud.

The second industrial policy action plan, launched in February, remarks on the urgency with which the non-compliance with country of origin label rules needs to be addressed. Johann Baard, the executive director of the Apparel Manufacturers of SA, said non-compliance with the country of origin labelling rules was widespread among retailers. "We have reports (that) confirm that there are large, JSE-listed retailers who are not complying," he said. He said more than 70 percent of local clothing manufacturers imported fabric from elsewhere, but often this was not apparent on the garment.

Sipho Tleane, the director of legal support and prosecutions at the Department of Trade and Industry, confirmed that an urgent action plan to police non-compliance was under way. "I have prepared a report suggesting some strategies for the plan following our surveillance of South African retailers," Tleane said.

According to Tleane, the department will look specifically for warehouses where retailers store imported clothing while clandestinely sewing on labels. He said smaller retailers and boutiques in particular were guilty of this violation.

Published on the web by Business Report on April 8, 2010.

COMMENT FROM ReDress Consultancy

This is an example of how the media can get a few facts wrong. The statement "very few of the garments bore country of origin labels" is somewhat misleading. The findings of the study reflected that the larger retailers have "Made in" labels but the majority of the garments have a label indicating "imported textiles." Some garments from YDE did not have care labelling. The smaller private owned boutiques were not fully compliant with the label regulations.

The study poses the following questions:

1. Why are South African designers using imported textiles? Is it because of the cost, the lack of variety from local textile mills or a poor marketing strategy from the South African textile industry?

2. Are South African consumers really interested in labelling? Would the promotion and marketing of why labelling is important in the context of supporting the local clothing and textile industry sector which in turn creates and sustains employment be beneficial to the South African clothing and textile sector?

Trade Protectionism

Cosatu favours more trade protectionism

Deputy minister suggests return to marketing boards

By Donwald Pressly

The shift to greater protectionism in South Africa's trade policy has been broadly welcomed by Cosatu, which addressed the trade and industry portfolio committee yesterday.

Etienne Vlok, a Southern African Clothing and Textile Workers' Union representative, spoke on behalf of Cosatu at hearings on tariff policy at Parliament. He particularly welcomed the focus on beneficiation in the Department of Trade and Industry's policy and hailed what Cosatu called "the possible use" of export duties where required to support this.

While he did not spell it out, export duties could be used to encourage local manufacturers to focus on directing their products to local markets rather than turning to international - and unpredictable - markets.

Vlok argued that the recent economic crisis had exposed the weaknesses of the belief that developing countries should focus on exports to grow their economies. "After decades of pursuing this strategy, many developing countries continue to export raw materials and import finished goods."

A strategy of import substitution was needed, both to create jobs and to address South Africa's trade deficit.
The trade policy could be "the spinal cord" linking manufacturing as well as agriculture through increased beneficiation and protection where required, the labour federation argued.
Asked by MPs whether the input cost of workers was not an important ingredient in garnering greater industrial competitiveness, Vlok warned against South Africa engaging in "a race to the bottom".
For example, workers in the eastern Free State were told that workers in Lesotho were accepting lower wages. Then those workers in Lesotho were told that workers in Madagascar were paid less than they were, so they were not competitive. Then the workers in Madagascar were told that Bangladeshi workers were paid even less. "Where does that end?" Vlok asked.

Published on the web by Business Report on April 7, 2010.

Retailers still violating SA apparel label regulations

Author: Renato Palmi

5 April 2010, South Africa

Recently, I led a group of fashion design students from Linea Academy on a field research exercise to investigate apparel labelling compliance, quality of clothing and comparative pricing. The results are interesting, and indicate a need for follow-up by both the South African apparel and textile industry sectors and the Department of Trade and Industry.

Apparel Label Regulations

The South African Government issued a notice announcing that as from the 15th April 2008, labelling of all goods to clarify “Country of Origin” in terms of the Merchandise Act 17 of 1941 would be enforced.

To ensure compliance with these regulations, the Department of Trade and Industry (DTI) and the South African Revenue Services (SARS) warned that they would randomly detain consignments of goods for checking, and would assign officials to carry out surprise inspections at retail outlets. If apparel was found not to meet the label regulations, companies and individuals (including independent fashion designers) could be liable to a R5 000 fine per item, or face imprisonment for three years, or both.

The regulations state that all items of merchandise falling under the Act are required be bear a label indicating the country of origin and whether imported textiles were used to make them, the fibre content and care instructions. An extension of the Act prohibits retailers from claiming that merchandise is "Made in South Africa" purely on the basis of the merchandise having undergone any reconstruction.

Field Findings

We inspected a range of garments at the popular Young Designers Emporium (YDE) boutique at Durban’s Pavilion shopping mall. YDE, owned by national retail chain Truworths, was created to provide retail space for local designers.

Despite the YDE website’s claim that the brand is renowned for its window campaigns, their visual displays offered no marketing material promoting local fashion design; there was nothing to encourage consumers to support locally designed and made-in-South Africa apparel. One would have hoped for – at the very least – designers’ bio-sketches to be showcased in the store; this feature is widely accepted nowadays as fundamental to buy-local campaigning, and critical for bridging and bonding the market with both the individual designer and the industry sector as a whole.

All the YDE garments we examined bore a "Made in South Africa" label; however, many garments had no labelling identifying the fabric content or whether the textiles used were local or imported.

As one student noted: "The brands I looked at had swing-tags with 'Made in' labelling, but none showed the fabric content or the origin of the textiles used." We observed that, of those garments that did identify the source of the textiles, all were imported.

The students found that several privately owned boutiques situated in the same mall are violating the labelling regulations.

Sifting through the racks of garments in one shop, a student found that "there were no care labels, and on some clothing, no labels at all. If there was a label, it read either ‘Made in China’ or ‘Made in Thailand’. At another private boutique, a student noted that "the clothing had no labels at all, and some garments didn't even have a price tag."

One student, who examined clothing at a boutique owned by an apparel group at the Gateway Shopping mall in Durban, said the only disappointment was finding an item labelled "Designed in South Africa – Made in Hong Kong." Tabulating her data on 10 garments from three retail chains, another student found that six items were made in South Africa, five of which had been made with imported fabric.

Make everything here!

We should all be disturbed that retailers are not bothering to comply with the labelling regulations. It could be that this dismissal arises from an attitude expressed by one respondent in a 2008 research enquiry I conducted on this issue: "Why bother? Government will do nothing about enforcing these new rules."

According to the DTI, the implementation of the label regulations was not intended to make life difficult for the designers or the apparel sector in general, but to regulate illegal imports and promote the purchase of clothing that is designed and made in South Africa.

It is imperative that both the Department of Trade and Industry and the textile and apparel industry sector, in collaboration with the South African Clothing and Textiles Workers' Union, act upon evidence of this nature. If these findings are ignored and little attempt is made to enforce the regulations, the considerable money and time spent on research, debates, workshops and interaction between government and industry, as well as the formulation of new industry policy, become farcical. Both government and industry should collaborate to ensure compliance at the retail juncture of the apparel and textile value-chain. If not, the work done to ensure constructive development and sustainability at the level of manufacturing will be, literally and figuratively, un-stitched.

In developing countries, the textile sector is recognised as an important platform for economic development and job creation. The South African textile industry continues be under stress, with textile companies either collapsing or retrenching staff, and this undermines the South African government's drive for job creation.

The prevalent finding from this small, localised field exercise was that retailers are selling apparel that is "Made in South Africa from imported fabrics". If local textile manufacturers wish to recapture the domestic market, this poses a serious question for the Textile Federation.

SA Clothing Union engages in HIV/AIDS education

From the South African Clothing Union

HIV/AIDS: SACTWU TESTS ALMOST 30 000 WORKERS

The Southern African Clothing & Textile Workers' Union (SACTWU) held its first National Executive Committee meeting for this year from 24-26 March 2010 in Cape Town. Our NEC received a number of important national organisational-, economic-, socio-economic- and political reports. Over the next few days, the SACTWU General Secretary will release the summary content of some of the most important reports and decisions of the recently concluded SACTWU NEC.

Program (SWHP) to combat HIV/Aids, specifically the work completed in 2009 and planned for 2010.

The NEC received a report on the union's work in the HIV/Aids arena in the clothing, textile and leather sectors, evaluated the outcomes of this work for 2009 and agreed on the priorities for 2010 . In summary, the report tabled to the SACTWU NEC showed the following national outcomes for 2009:

* a total of 29 329 SACTWU members have received Voluntary Couseling & Testing (VCT) through the SWHP (in 2008, the figures were 10,439);

* the SWHP has reached 155 284 workers (some more than once) in more  than 1000 workplaces with a targeted workplace-based HIV/AIDS prevention awareness message;

* 265 workers have been initiated onto our ARV pilot project;

* more than 1000 shop stewards have been trained in a range of

HIV/Aids awareness-, treatment- and prevention skills;

* an SWHP-run Wellness Clinic was launched in Cape Town in October

2009, providing testing and support services for VCT, blood pressure, sugar levels, TB testing and female wellness screening such as pap smears;

* 81 unemployed previous SACTWU members have been trained as Home-based Carers and a total of 4 447 home care visits were conducted;

* our HIV/AIDS awareness Drama Group has conducted 212 performances at 72 schools covering 33 936 learners in communities where our members reside;

* the Sactwu Fashion Design Institute (Safdi) ran a Condom Fashion Design Competition targeting young workers with a "Condoms are Fashionable" message: 50 000 colour condoms were used to manufacture fashion garments which were first modelled to 10 000 union members attending the SACTWU 2009 Spring Queen Fashion Pageant held in the Good Hope Centre in November last year;

* the run-up to World Aids Day 2009 saw on a month-long VCT focus program, culminating in a lucky draw competition for those union members who had participated, with the winners in each of the union's 5 regions winning a flat screen TV;

* strategic parnerships were strengthened with a number of Provincial Health Departments;

* 411 756 condoms (388 962 male and 22 794 female) were distributed;

* 352 new condom distribution outlets were set up in establishments (such as factories and union offices) accessed regularly by SACTWU members;

* support groups for HIV-positive members were rolled out in all 5 of the union's regions;

* 329 workers received social work-related support;

* 24 HIV positive members registered on the union's R10m strong HIV/Aids Benevolent Fund;

* more than 1000 booklets covering the clothing industry HIV/Aids workplace policy entitled "Code of Good Practice on Key Aspects of HIV/Aids and Employment Within the Clothing Manufacturing Industry of South Africa" were distributed to SACTWU shop stewards and they were trained on its content;

* a national HIV/Aids policy for the textile sector was negotiated in the National Textile Bargaining Council (NTBC). It was submitted to the Minister of Labour for gazettal. It was gazetted and extended to cover all

workers, employers and companies covered by the scope of the NTBC.

For 2010, the union's NEC resolved to firstly support government's new campaign to be launched in April this year to test 15 million South Africans, secondly to strengthen the HIV/AIDS related support, prevention

and treatment services the SWHP had provided during 2009 and thirdly, to launch a second mobile clinic focusing on our HIV/Aids work to operate in the Illembe and Ugu Districts in KZN.