New law has compliance and cost implications for suppliers

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Article by: Tracy Hancock

Published: 04 Jun 2010

New law has compliance and cost implications for suppliers

The implementation of Section 59 of the Consumer Protection Act (CPA) No 68, of 2008, later this year, could result in cost implications for South African suppliers, as well as requiring compliance with legislation other than the CPA, including the Waste Management Act (WMA) No 59, of 2008.

The CPA is likely to come into effect in two separate phases during the course of 2010 with the commencement of the bulk of the Act’s provisions, which includes Section 59, in the second half of this year.

A requirement of Section 59 is that suppliers of ‘particular goods’ will have to accept the return of such goods and certain wastes, specifically components, remnants, containers or packaging, that are generated as a consequence of using any goods that cannot be deposited into a common waste collection system, from consumers.

The supplier is required to accept its goods or the waste generated by the use of such goods irrespective of whether that particular supplier sold the product to the consumer in the first place. Further, the supplier will not be allowed to charge consumers for that service, reports legal sustainability specialist law firm Warburton Attorneys attorney Alistair Young.

Once suppliers have received goods or waste from consumers, they have the option of sending the goods or waste to the importers, producers or distributors of the goods or incurring the cost of disposing the waste themselves.

“Section 59 arguably has good intentions and provides for a form of extended producer responsibility; however, it could place fairly substantial obligations on a supplier and it is possible that the true ambit of the section might be determined by other legislation, specifically the WMA,” says Young.

He believes that the need to comply with other national legislation as a result of Section 59 was possibly not envisaged when the legislation was drafted. “A shortcoming of Section 59 is that it does specifically identify the particular goods or the types of wastes that will fall within the ambit of the section, leaving the scope of the section open to interpretation. Accordingly, the immediate implications to suppliers when Section 59 of the CPA comes into effect will be the subject of debate, especially in light of certain requirements under current waste legislation,” explains Young.

He says that suppliers must recognise that, at some stage in the near future, they will have to accept certain goods or certain wastes from consumers, which could include materials that constitute hazardous waste in terms of the current waste legislation. When a supplier receives returned waste from a consumer, and stores that waste pending its ultimate return to a producer, importer or distributor, or its lawful disposal, a number of general duties may be triggered in terms of the WMA.

Section 21 of the WMA requires that the holders of waste, which include those who store waste, must ensure that the containers used to store waste are intact and not corroded, adequate measures are taken to prevent leakages or spillages, odours are prevented and visual impact is avoided. When the waste is disposed of, the supplier must ensure that it is done in a manner that does not harm the environment or individuals.

“Further, individual suppliers could face a situation where the storage of hazardous waste materials returned by consumers may exceed the waste storage thresholds contained in the listed waste management activities under the WMA. If so, this would result in the need to obtain a waste management licence for the storage facility. The licence will only be issued after complying with certain environ- mental-assessment requirements as part of the waste management licence application, in terms of the WMA,” says Young.

Like Section 59 of the CPA, the WMA also makes provision for extended producer responsibility, although in far more detail than the CPA, and it is the WMA that represents the preferred approach in which to introduce extended producer responsibility into South African law. This could, perhaps, be best achieved through the application of Section 5(3) of the CPA, which allows for regulatory authorities to apply to the responsible Minister for an industrywide exemption on the grounds that provisions of the CPA overlap or duplicate another scheme already administered under other national legislation. However, until such time that an exemption is approved, suppliers would still be bound to comply with Section 59 of the CPA.

Young concludes: “The implications of Section 59 will only be fully realised once the section has been implemented, although it is clear that the full ambit of the section will be determined by other legislation, including the WMA. Accordingly, it will be wise for suppliers to establish their potential liability under the WMA, especially as it provides for fairly severe fines/prison sentences if persons are found guilty of noncompliance with certain provisions.”