EAC CONSUMER PROTECTION LEGAL FRAMEWORK

Presented by:Dorica Phiri Nkhata, Trade Adviser -

EAC Secretariat

At the:Sixth Annual African Consumer Protection

Dialogue Conference, 8th – 10th September 2014

Lilongwe, Malawi

Introduction – Quick Facts about EAC

Area (incl. water): 1.82 million sq. km

 Population:   141.1 million (2013)

GDP (market prices):   $99.8 billion (2013)

 EAC Headquarters:   Arusha, Tanzania

 First established (officially):   1967

 Re-established:   July 7, 2000

 Main languages:      English, Kiswahili

3

Single CurrencySingle Customs Territory

4 Freedoms & 2 Rights

Political Federation

The Vision of EAC is a prosperous, competitive, secure, stable and politically united East Africa

United East Africa

EAC Mission :to widen and deepen Economic, Political, Social and Culture integration in order to improve the quality of life of the people of East Africa through increased competitiveness, value added production,

trade and investments.

3

EAC Strategic Plan

Background• EAC Competition Policy was adopted in 2004 & EAC Competition Policy was adopted in 2004 &

EAC Competition Act was passed in 2006EAC Competition Act was passed in 2006

• EAC Competition Regulations adopted in 2010 to EAC Competition Regulations adopted in 2010 to further elaborate some key aspects in the further elaborate some key aspects in the implementation of the EAC Competition Actimplementation of the EAC Competition Act

• The Act provides the framework for the promotion The Act provides the framework for the promotion and and protection of fair competition and consumer protection of fair competition and consumer welfare welfare in the Communityin the Community. .

• The Act The Act provides for the establishment of an EAC provides for the establishment of an EAC Competition Authority to oversee the Competition Authority to oversee the implementation and enforcement of the Actimplementation and enforcement of the Act

Background, cont’d

Objectives, Article 3-1.Enhance the welfare of the people of the Community – by among others providing consumers access to products and services within the Community at competitive prices and better quality 2.Enhance competitiveness of community enterprises in world markets by exposing them to competition within the Community;3.Create an environment which is conducive to investment in the Community;4.Bring the Community’s competition policy and practice in line with international best practices;5.Strengthen the EAC Partner States’ role in relevant international organizations

Scope of the EAC Competition Act

• Applies to all economic activities and sectors having cross border effect

• Does NOT apply to :• Any conduct of persons acting in their capacity as

consumers• Collective industrial bargaining• Sovereign acts of Partner States (subject to

provisions on “PS subsidies” and “public procurement”)

• Restraints on competition by PS’ regulation of specific sectors or industries to the extent that the anti-competitive conduct in required by such regulation within the jurisdiction

Scope of the EAC Competition Act, cont’d

•Act provides for : ▫Restraints by enterprise▫Abuse of market dominance ▫Mergers and acquisitions▫Partner State subsidies▫Public procurement▫ Enforcement procedure ▫Consumer welfare; and ▫ establishment of the EAC Competition

Authority

Consumer Welfare

• Undertaking shall not in connection with the supply or possible supply or promotion of goods/ services make false representations regarding :• the standard, quality, value, grade, composition,

style, model or particular history, performance characteristics, uses or benefits;

• availability of facilities for the repair of goods or of spare parts for goods

• Place of origin• Existence, exclusion or effect of any condition,

warranty, guarantee, right or remedy

Consumer Welfare, cont’d• Undertaking shall not in connection with the supply or

possible supply or promotion of goods/ services engage in conduct that is in all circumstances, unconscionable conduct in consumer transactions

• In making determination, Authority may have regard to :• Relative strength of the bargaining positions of the

undertaking and the consumer• Whether as a result of the conduct engaged in by the

undertaking, the consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the undertaking

• Whether the consumer was able to understand any documents relating to the supply or possible supply of the goods/ services

• Whether undue influence or pressure was exerted on the consumer

Consumer Welfare, cont’d• Authority shall publish in atleast two newspapers

of national circulation in each of the PS, a notice containing one or both of the following:• Statement that goods of a kind specified in the

notice are under investigation to determine whether the goods may be injurious to public health

• A statement of possible risks involved in the use of goods of a kind specified in the notice

• Authority shall by notice announce the results of the investigations and what action if any, proposed to the taken in relation to the goods

• Council may issue notice of ban of the goods specified in the notice

Consumer Welfare, cont’d• An undertaking shall not supply goods that are

intended to be used by the consumer if the goods are of a kind:• Which do not comply with the prescribed standard,

if there is any• If there is a notice in force declaring that the goods

are unsafe goods• If there is in force a notice under any law imposing

a ban on the goods• A person shall not export goods, whose supply in

the Community has been prohibited under the provision unless Council has approves the export of those goods

Consumer Welfare, cont’d• If a person wishes to bring an action but does

not know the manufacturer of goods, he may serve on the supplier a written request for the particulars relating to manufacturer of the goods

• If the supplier has not provided the information about the manufacturer within 30days, the supplier of the goods shall be presumed to be the manufacturer and appropriate action may be brought against the supplier

Enforcement procedure• Authority may at any time, upon

application by an interested party or by a PS, certify that there are no grounds for applying prohibitions provided in the EAC Competition Act

• Authority has the power to carry out any investigations where it is of the opinion that the facts upon which it made the decision are false or inaccurate

Enforcement procedure, cont’d• PS or person may file a complaint with the

Authority against a PS or any person for a breach of the provisions of the Act

• PS / person dissatisfied with decision of the Authority may appeal to the Court

Enforcement procedure, cont’d• Authority is under a duty not to disclose any

information acquired in the course of performance of the functions under the Act

• Contravention- offence and liable to fine of not more than USD 10,000, imprisonment to term of not more that 6 months or both

• Sanctions• Any Contract or agreement in violation of the

Act shall be void• Authority shall order divestiture of any Merger

or acquisition implemented contrary to the Act

EAC Competition Authority• Shall operate on an adhoc basis for an

initial and transitional period of not more than 5 years

• Composition- 5 commissioners (1 from each Partner State)

• Commissioner shall serve for a term of 4years and shall be eligible for an appointment for a further term of 4 years

EAC Competition Authority• Shall have powers necessary for and conducive

to the implementation of the Act:• Gather information• Investigate and compel evidence (including

research and seizure)• Hold hearing• Issue legally binding decision and impose

sanctions• Refer matters to court for adjudication• Recommend to Council to make regulations• Develop appropriate procedures for public

sensitization, consultations and participation • Collect date, undertake studies and publish

reports

EAC Competition Authority, cont’d• Authority and PS shall mutually cooperate

in the implementation of the EAC Competition Law

• Determination of any violation of the Law is within the exclusive jurisdiction of the Authority

• Resolutions & decisions of the Authority shall be legally binding upon PS’s authorities

EAC Competition Authority, cont’d• Decision made by the Authority shall be

enforceable by PS’s enforcement authorities.

• Each PS should establish a competent authority to deal with competition matters at the national level & at the same time cooperate with the Authority at the regional level

• EAC Partner States are at various levels of establishing their national competition Authorities

Thank you for your attention