Safeguarding Consumer Rights

THE Namibia Consumer Trust was recently invited to a seminar on envisaged consumer rights legislation. The seminar was organised by the Law Reform and Development Commission in the Ministry of Justice. We have long been calling for such legislation and efforts in recognising consumers’ role in the economy is only natural.

While applauding such plans we would also like to remind the relevant stakeholders that the legislation ought not to regulate the consumer. It is abundantly clear that consumers clearly were disadvantaged due to a lack of any form of legislation to enforce/safeguard universal consumer rights. The only action consumers so far could take was to either stop buying from a particular e.g. a retailer or stop buying a particular product. Alternatively consumers could only complain to the same wrongdoer for remedial action. This is basically same for service providers. The recent food crisis followed by the economic crisis made it clear that the system and society cannot only rely on goodwill and interpretation of ethics by business people. The recent scrapping of VAT from certain food items for example did not reach the consumer, because somebody decided to indeed remove the tax, but also increased the price of the product!The NCT intends to make a significant contribution to the envisaged consultative and transparent process. It is however hoped that in line with the purpose of the act, that business/service provider representation will not be disproportionate to that of consumer representation. It was mentioned by a presenter that a fellow southern African country had neglected this aspect and that corrective action had to be taken in the middle of the process.While there is a lot to talk about regarding the above matter, I would like to touch on an issue which should also be addressed in the legislation, as a symposium was recently held by the Bank of Namibia. In terms of their promotion of policy dialogue a symposium on privatisation was held. The Governor of the Bank of Namibia started off the debate by stating that having two extreme views on an issue will not work. He further stated that privatisation might play an important role in terms of consumer choice. He also said there are instances where government can deliver a service better while the opposite is the same for the private sector. His conclusion was that government should step in when markets fail and that the public expects government to step in. Another speaker, the Minister of Trade and Industry. expressed similar views in terms of two voices with opposing views. He said that the issue of privatisation needs to be revisited. He also raised the need for redistribution of wealth (especially considering the gap between the rich and poor in Namibia) and that privatisation should serve a purpose other than just transfer of public assets. The Minister opted to leave it up to Economist, Academics and industry executives not only to advance their arguments, but to substantiate them. I would have probably taken the same approach. One seemingly pro-privatisation presenter cited successes in other countries, but mentioned one of the major reasons against privatisation as ‘its negative impact on poverty and income inequality’. He further cited critics of privatisation that price adjustments thereafter are ‘often excessive and unjustified, with an especially harsh impact on low-income consumers’. However in later studies it was apparently found that consumers instead gained, but as he concluded the process should be tailored to local conditions with strengthened regulatory frameworks and transparency. Another presenter had quite interesting ideas/processes about privatisation. Some of his advice included amongst others: ‘in many cases there will be price increases, but don’t tell the public that’ and another one was ‘make people angry about SOEs if you want to privatise’. Of course I believe this is a good man, but honestly, any gains in such a way will be temporary and people will sooner or later see and feel the effect. Even if privatisation through such a method is found to be beneficial, is that ethical and will it work in a transparent democracy? Another academic cited fellow researchers who are quite critical of privatisation and advanced the argument that it is the privileged who benefit at the expense of the welfare of the people. It was very interesting to see how industry leaders thereafter contradicted each other in their attempts to justify privatisation. One asked ‘should water not be recovered at a cost?’, yet he feels transport, education and health care should be free of charge. It was very clear as per the discussions that it is the privileged (top executives and business tycoons) who are in favour of privatisation. This is giving reason for people to be concerned, especially if you have top executives such as the one in the energy sector who reportedly stated something to the effect that if you need bread and cannot afford it, then do without it. That kind of speech and approach is insensitive and reckless. It gives reason to consumers to be very concerned in terms of lack of commitment to consumer wellbeing and redistribution of wealth.Another economic researcher cited the telecommunications sector apparently as a clear case (example) of privatisation, but is it not the same sector which was advised by the President in recent years to reduce their tariffs and is it not the same sector which generates a lot of complaints in terms of consumer ability to even make a paid call during certain periods? And how basic is this service?However one executive made some sense when he said we need a plan to guide the process and fortunately this country has such a plan already and we only need to honour and implement it. Article 98 (1) of our constitution states that ‘the economic order of Namibia shall be based on the principles of a mixed economy with the objective of securing economic growth, prosperity and a life of human dignity for all Namibians’. While the courts may not be able to enforce this, ‘government may be guided in making and applying laws to give effect to the fundamental objectives of the said principles’ in accordance with article 101. This did not feature in the debate, but it is clear which route Namibia should be taking, therefore we only ought to implement the supreme plan of our country.Michael Gaweseb Namibia Consumer TrustNote: This contribution has been shortened – Ed