The ACL and Product Safety
The Australian Consumer Law has been introduced through the enactment of the Australian Competition and Consumer Act 2010 (Cth). The legislation replaced the Trade Practices Act 1971 which prior to the passing of the ACL had the obligation of governing the rules in relation to fair trading and consumer protection. Consumer laws are primarily enacted for the purpose of ensuring that there is a balance created between the power of the seller and the consumer. In the modern place large corporations have the power of exploit consumer rights. They can do this through providing bad quality products and services to the consumer. Where the consumers are not provided any platform to take actions against the large corporations they would be subjected more exploitations as the corporations would exploit them more to earn profit and attain their objectives (Twigg-Flesner 2017).
The primary purpose of this paper is to the discussed the provisions of consumer protection in Australia and the responsibilities which the large organizations have towards the customers with respect to providing them with quality products and services. The paper has carried out the discussion in the light of three consumer law cases in Australia. The paper also analyzes whether there is any difference between what is required ethically and the present legal requirements.
The corporations have been provided with several responsibilities in relation to the products and services they make available in the market for consumers. These responsibilities have been specifically outlined through the Australian Consumer Law. The ACL consists of National Consumer Product safety laws. These laws are applicable on consumer products and goods related services. Consumer goods are those goods and products which have been purchased for domestic, household or personal consumption or use. Product related services include, consumer goods installation, repair, maintenance and cleaning, delivery and assembly. A person who, in commerce or trade, supplies consumer products or goods related services has the liability of complying with safety regulations of ACL. This signifies that in the supply chain all the suppliers have to keep up to date with the legal provisions and comply with bans or standards. The Minister of commonwealth has the right to issue mandatory safety standards which set particular requirements for consumer products and goods related services. It is an offence for the corporations to supply consumer products and goods related services which are not in compliance with the mandatory safety standards. These penalties are provided through section 104-108 and 194-196 of the ACL. A mandatory safety standard for a consumer good has the capacity of setting standards including the way in which goods are made, what the goods contain, how the goods are designed, the test which needs to be passed, and whether the goods should be supplied with any instructions or warnings. On the other had mandatory safety standards in relation to services can specify the way in which services are supplied, the qualification and skills of person supplying the services, the materials used for supplying the services and the test which the services may pass (Steinwall and Griggs 2015).
Product Testing
The Australian minister also has the power to regulate goods and services through the application of information standards. The requirements in relation to information standards have to be complied with by the suppliers. These provisions are provided by s134-135 of the ACL. Goods which are not n compliance with the safety standards should not be supplied by the corporations. They must also not manufacture, process or have control of the goods. The corporations must also recall supplied goods in relation to an order form the minister. It is also the responsibility of the corporations to notify the commonwealth in case they get information that a person has got serious illness, injury or death due to the use of goods and product related services within two days. Any consumer who has suffered damage or loss because of safety defect has the right to make a complaint to the Australian Competition and Consumer Provisions and also file a legal claim against the manufacturer under part 3-5 of the ACL to get compensation (Amir et al. 2016).
Under the ACL, corporations are required to utilize and abide by product safety testing and test reports for products related to the consumers. A mandatory safety standard or ban can be made when the product has caused or may cause death or serious injury. Even were only a very limited number of consumer products are comprised of safety standards or ban, most other products are provided with voluntary standards. These standards are important because it helps the corporations to assess the products against particular criteria and ensure the safety of the products. Voluntary standards are incorporated by many suppliers into their regular quality assurance. Mostly, mandatory standards and bans include performance requirements or technical natures which have to be complied before a product is launched in Australia. It may be important for the corporations to hold test reports in certain cases to demonstrate compliance with the standards which may be obtained through specialist and independent test laboratories. Voluntary standards can also suggest technical performance, which is in relation to product, safety, quality or performance and may also have their private specifications or use voluntary standards for products sourced by them. The corporations have to ensure both product safety and compliance of the products with the claims made by them under the ACL. This is applicable whenever a corporation buy, distribute, make or sell products. Product testing, risks management and quality assurance to mandatory and voluntary standards all play a significant role in the validation process (Howells and Weatherill 2017).
Responsibilities of Suppliers Under ACL
Under the ACL, certain guarantees are provided to the consumers when they buy services and goods commonly called consumer guarantees. National product safety laws are also included in the ACL which provide responsibilities for Australia, territories and state corporations. These responsibilities are inclusive of issuing safety warnings, managing recalls and banning goods. The consumer goods and product safety framework outlines specific remedies for the consumers which there is a safety defect with a particular goods or services. However both these frameworks have separate operations. Testing can be regarded as a source of information for the Australian Competition and Consumer Commission in analyzing whether corporations have complied with mandatory products safety needs and consumer guarantees (Pearson 2018).
Under the ACL a supplier has been defined by a person who is in the business of exchanged, sale, lease or hire of goods and services. The definition includes all retailers and those who purchase products for resupply. Thus corporations indulging in such activities are suppliers under the ACL. Voluntary standards, mandatory safety standards and Ban can be changed or introduced with respect to the emergence of a new product in the market. Prior to a product reaching the Australian market, it is necessary for such corporations to ensure that the products comply with the safety level expected by the consumers. They must also not indulge in selling or buying products which are banned and all products meet relevant safety standards. There are various actions which corporations may indulge in for the purpose of ensuring that their products comply with mandatory safety standards and ban and consumer guarantees (Dixon 2017). These include, sourcing products from reputed manufacturers, asking for evidence in form of compliance, commissioning independent tests, conducting own testing and commissioning an accredited certification agency.
Although goods which are supplied in the market place have to be in compliance of the required safety standards, there are no legal requirements in relation to testing which the suppliers have to comply with. However in reality, an investigation of a potential non compliance will include a request to access test reports. Testing may itself be commissioned by the ACCC. Where the testing signifies that the product does not comply with the standards, and a valid report cannot be produced by the supplier, a lack of attention may be derived on the part of the supplier by the ACCC in the absence of such report and may lead to critical compliance issues. The ACCC would have the right to take more serious enforcement actions in such cases. In the same way it may be considered as sensible for the supplier corporation to have access to a test report which shows compliance in relation to the supply of a product or service having a claim that it meets the required standards. The ACCC have been provided with the powers to compel people to provide data which support the claim made by them. In case claims cannot be substantiated or are misleading or false, the suppliers may be subjected to ACCC actions. These actions may consists of providing them with a notice of infringement, civil proceedings to impose pecuniary penalties or subjected them to criminal prosecutions (Grantham 2018).
Actions by Corporations to Ensure Compliance with Consumer Laws
In relation to the first case study, a routine compliance check had been initiated by at a children and maternity retailer. There were three produce which had failed to comply with a revenant mandatory standard. A cot did not have warning in relation to who it is to be used and two latex soothers did not have warning about the strangulation risk associated with the product. There was an agreement by the retailer through which he was to provide an undertaking to the ACCC about compliance commitments. Although they did not have the obligation of testing, if testing was carried out they would have ensured compliance (Griffiths 2015).
In relation to the second case study, in 2012 the ACCC came to know about small high capacity magnets, found in products such as puzzles, modelling kits and desk toys. In case more than one of such magnets was swallowed by a child it would lead to serious complications including the death of the child. Interim bans had been imposed by the ministers on the supply of such products. These products had been subsequently totally banned in Australia by the commonwealth minister (Taylor and McNamara 2014).
In the case of Queensland Office of Fair Trading v Sunrise Imports [2013] MAG– 218235/12(3) which is the third case for the purpose of this paper, a wholesale and import company was provided with a number of warning letters as well as infringement notices regarding children toys safety standards breach. A few products had been immediately banned from sale in Australia. These products included toys containing magnets and plastic products having more than 1% DEHP. The ACCC took a spot test on the company in July 2012 where various non compliant goods had been identified and seized. A pecuniary penalty of $60000 had been imposed on the company. The directors were also charged $15000 as fines.
The ethical theory of deontology suggests that a person should indulge in an action which is in compliance of duties and is an action he would prefer everyone else to undertake. The theory of utilitarianism suggests that a person must do an act which derives maximum happiness (Mill 2016). Thus under these theories of ethics also product testing is ethical as they would result in maximum happiness and compliance with duties. Testing products even where it is not legally required may help in ethical compliance and protect a corporation from prosecution. A proper compliance program has to conduct an independent test with respect to the products for the purpose of validating compliance.
Conclusion
Although, goods which are supplied in the market place have to be in compliance of the required safety standards, there are no legal requirements in relation to testing which the suppliers have to comply with. However in reality, an investigation of a potential non compliance will include a request to access test reports. Testing may itself be commissioned by the ACCC. Under the theories of ethics product testing is ethical as they would result in maximum happiness and compliance with duties. Testing products even where it is not legally required may help in ethical compliance and protect a corporation from prosecution. The case studies signifies that in case the corporations in contexts had indulged in voluntary testing of products they could have been able to avoid the legal sanctions imposed on them and the bans imposed on the supply of their products
References
Amir, L.H., Griffin, L., Cullinane, M. and Garland, S.M., 2016. Probiotics and mastitis: evidence-based marketing?. International breastfeeding journal, 11(1), p.19.
Australian Competition and Consumer Act 2010 (Cth)
Dixon, W.M., 2017. Termination for convenience or not?. Australian Business Law Review, 45(3 (45 ABLR 229)), pp.229-242.
Fair Trading v Sunrise Imports [2013] MAG– 218235/12(3)
Grantham, R.B., 2018. To Whom Does Australian Corporate and Consumer Legislation Speak?.
Griffiths, J., 2015. Application of the Australian consumer law to government commercial activities. Commercial Law Quarterly: The Journal of the Commercial Law Association of Australia, 29(3), p.3.
Howells, G. and Weatherill, S., 2017. Consumer protection law. Routledge.
Mill, J.S., 2016. Utilitarianism. In Seven Masterpieces of Philosophy (pp. 337-383). Routledge.
Pearson, G., 2018. Enforcement and Effectiveness of Consumer Law in Australia. In Enforcement and Effectiveness of Consumer Law (pp. 75-97). Springer, Cham.
Steinwall, R. and Griggs, L., 2015. Australian Journal of Competition and Consumer Law. Competition and Consumer Law Journal, 23(2).
Taylor, D. and McNamara, N., 2014. The Australian consumer law after the first three years-is it a success?. Curtin Law and Taxation Review, 1(1), pp.96-132.
Trade Practices Act 1971 (Cth)
Twigg-Flesner, C., 2017. Consumer product guarantees. Routledge.
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