CAA media friendly in achieving consumer aspirations

“Tesco” in the United Kingdom is, if not the largest, one of the largest supermarket giants in the United Kingdom, with branches all over the country and abroad, collecting enormous profits. It is a household name in the UK catering to households everyday. The Times too is one of the main newspapers which claims largest circulation in the country.

According to The Times dated 26th Saturday 2007, Tesco, Britain’s biggest supermarket chain, admitted miss-selling ordinary chicken as premium-priced 2corn fed” after tests conducted for The Times.

The tests were conducted in Defrea Science laboratory in New York on behalf of The Times. It has been the practice of the media to take charge of public interest consumer issues. When there were allegations against a Cola giant of suing Thames water direct, it was the media who got the cola company to back down.

This shows how active and organised consumerism is in the West. It is time civil society, non-governmental organisations and charitable organisations such as Jaycees, Lions and NGOs such as Sarvodaya could be a part of consumerism activism with the help and guidance of the Consumer Affairs Authority, which acts as a catalyst and a guiding force to protect the consumer and regulate trade by regulatory powers and consumers proper.

Activism by the CAA has targeted to establish consumer associations in every village and district in due course.

We request our media too to be a part of our team, continuing being critical and guiding us in our civic duties. We have developed an excellent relationship with the media and the NGOs without whom we can not deliver the goods to the consumer. Every citizen is a consumer and we are bound to serve the entire nation.

It is the trend today that the consumer is sharp and educated on their rights and duties. The CAA is unable to conduct the battle alone. The assistance of the media and the civil society is a necessity to achieve the aspirations of the consumer and the trader.

The aim of the CAA is to have just traders and sharp and alert consumers for better consumerism and a better life for the citizen devoid of exploitation and to provide them with healthy consumer items of high standards at a reasonable price.

We invite you to be a part of our team in achieving our objectives of giving the due place for the consumer in society.

In the West, the consumer is the king they say as they consider the consumer to be supreme and one that does no wrong. Let us crown him by working hand in hand with the rest of the members of society.

Sarath Wijesinghe, Chairman, CAA

Why a competition law?

Theoretically speaking, trade liberalisation is one of the most effective measures to ensure competition in the market place and abuse of market power. However, even this has its limits. Imported goods cannot reach the customers directly and the well entrenched market players way have a grip over the distribution systems or channels, which way nullify the gains of liberalised trade.

Then there are goods and services which are not tradeable. There are goods which are tradable only within a limited market, cement being a classic example of this due to its bulby nature it is no economical to transport it to distant markets. As a result even geographical segments of a national market can be successfully monopolised.

Therefore, it is not surprising to see that while countries have gone to more and more trade liberalisation over the last decade, more and more countries have also embraced competition laws with many adopting new laws after scrapping their old ones. In the beginning of 1990 or so, there were number of countries with a competition law.

However, at present, the number is more than it was and many more in the queue obviously there is a greater acceptance of the fact that trade liberalisation may not always be a perfect remedy for an abuse of market power. The need for a competition law thus arises from the following factors.

(a) To take care of the anti-competitive practices designed to restrict the free play of competition in the market.

(b) To take care of the unfair means adopted by firms against the consumers in order to extract the maximum possible consumer’s surplus and

(c) To maintain and promote the competitive spirit is the market.

Competition policy and other policies

Competition policy is a integral part of economic policy. The main objective of competition policy is to preserve and promote competition as a means to ensure efficient allocation of resources in a economy, resulting in the best possible choice of quality, the lowest price and adequate supplies to consumers.

Although a competition law may be quite narrow in its scope, competition policy is much more broad and comprehensive in its scope and tries to bring harmony in all government policies that may encourage or adversely affect competition and consumers welfare. To put it differently, ensuring competition is just a means to achieve the above stated objectives.

There are complex inter-relations between competition and other public policies. This factor has a direct bearing on the extent to which competition policy objectives can be pursued without being constrained by or confliction with other public policy objectives.

Accordingly, even in the absence of a competition law a stated competition policy, many of the related concerns can be addressed, at least partially, if there are other polices, which are favourable to competition.

Different Government policies that way encourage or adversely affect competition, and hence consumer welfare, particularly in the context of the present globalising environment would include.

Trade policy, industrial policy, regional development policy, privatisation policy, regulatory reform policy, fiscal policy, intellectual policy, consumer policy, labour policy and environment policy.

In addition, sector-specific policies in various areas, such as health, electricity, telecommunications, financial services etc, also effect competition in the country’s economy.

Executive Director,
C.A.A.

Regulating service providers to ensure protection of consumer interests

provision of telecommunication services:

A talk delivered at a recent seminar held at OPA Auditorium, Colombo on “Consumerism and Regulatory Powers” by Mrs. Pushpa Rene Amarasiri, Director of Legal Affairs, Telecommunications Regulatory Commission of Sri Lanka

Telecommunication policies in Sri Lanka have been changing rapidly during the past few years. Liberalisation commenced in 1980 with the bifurcation of telecommunications from postal services.

With the enactment of the Sri Lanka Telecommunications Act No. 25 of 1991, as in many other administrations the regulatory functions were separated from operational functions and a single person Regulatory Authority was established similar to that of Great Britain. The main Public Telephone Operator, Sri Lanka Telecommunications Department was made a Corporation.

With an amendment made to the Principal Act by enacting Sri Lanka Telecommunication Amendment Act No. 27 of 1996 the single person Regulatory Authority was replaced with a five member Commission with a certain degree of administrative flexibility.

In the ever changing, ever developing telecom environment in Sri Lanka the telecommunication service options are no longer with the business community and the privileged few alone. The telephone has become a necessity for many households and it is imperative to safeguard the consumers’ interests.

When regulating a dynamic industry like telecommunications naturally, the regulator will have to face many challenges.

For examples:-

* Consumer Protection.

* Facilitating Universal Access.

* Ensure that effective enforcement mechanisms are in place.

* Help to promote public interests where market principles override public good.

* Fair allocation of scares resources.

* Formulate clear and unambiguous rules and regulations.

* Establishment of Technical Standards.

* Human Resources Development etc.

* Transparency in licensing etc.

For effective regulations it is important to have an independent regulator, an impartial referee to formulate rules and guidelines under which market players will provide services to the public.

Independence is the ability to act in public or social interest without regard to specific or ephemeral political interests which are liable to jeopardize long-term policy objectives. To enforce the decisions effectively, independence becomes a vital factor.

It is important for us to ensure that the Members of the Commission and the Staff of the Regulatory agency should not have any direct or indirect interest in a regulated company or a user of scarce resources.

“Managing scarce resources effectively” is an important responsibility of a regulator. Scarce resources include radio frequency spectrum, rights of way and numbering. These scarce resources must be allocated in a fair and transparent manner.

It is not that we have a big basket of spare spectrum to hand out like Halloween Candy. To protect against abuse and influence, the persons responsible for allocating such resources should not have any connection to a user of these resources.

There are pressing demands for the radio frequency spectrum. Requests for bandwidth, interferences/wrongful emissions, under-utilized and unutilized spectrum are some of the issues the regulators will have to face when managing the radio frequency spectrum.

There are debates over each slice of the spectrum, with some grabbing as much spectrum as possible merely to sit on it. Some hold the spectrum hostage and make money out of it by holding it out as ransom.

The last thing they ever want to do is to admit they could make do with a lesser slice of the spectrum but users will generally fight tooth and nail against giving-up any spectrum.

Interference with radio frequencies assigned to users, by other users is a problem for the regulator to resolves as it creates bad signals. In Sri Lanka the eco sounders given to fishermen are not tuned to the frequencies assigned. Very often these interfere with air traffic controls. In many other countries such as USA, UK and Canada the problem is different. Interference is caused by the use of ‘baby alarms’.

Where numbering is concerned it is important to ensure competitive neutrality in administrating the issue of numbers. Unlike the radio spectrum, numbering has only recently come to be recognised as a scarce resource meriting public attention. Each country should have its own national numbering plan. In Sri Lanka the National Numbering Plan was successfully implemented in the year 2002.

It is important for the Regulator to get involved with numbering. The national numbering plan is a national resource which must be managed in the overall national interest.

Service providers have challenged many of our directions in Courts of Law. It is nothing to be perturbed about. An effective regulator will have to face these challenges.

We publish working papers for public comments. We have been transparent in our decision making processes and passing laws is just the first step, it is up to the regulator to put flesh on the bones.

We follow a transparent dispute resolution process with regard to resolution of consumer complaints.

Section 9 of the Act gives immense powers to the Commission to inquire in to the complaints made by the Consumers or the general public and where appropriate the Commission could direct financial redress to be provided to rectify the cause which gave rise to the complaint.

Continued next week

Coconut Oil: Measures to arrest adulteration

Coconut Oil is one of the main cooking oils used by Sri Lankans from ancient times. The total annual production of coconuts varies due to several reasons. The total extent cultivated has been on the decline with time, mainly due to the uprooting of coconut trees for land sale activities.

The amount of coconut oil produced in the country is not sufficient to meet the demand and this has resulted in adulteration of coconut oil with other cheaper oils.

The Coconut Development Authority has taken steps to set up a Technical Committee to address issues related to quality and adulteration of coconut oil.

This Committee comprises members from the Ministry of Coconut Development, the Consumer Affairs Authority, Ministry of Health, Industrial Technology Institute, the Coconut Research Institute, City Analyst, the Sri Lanka Standards Institute and the Coconut Growers Association.

A study was carried out under the guidance of this Committee to assess the quality of coconut oil available in the market. This study was conducted in the Colombo, Kalutara, Gampaha, Kurunegala and Puttalm districts. 145 samples were drawn from the study areas mainly covering retail outlets.

This survey disclosed 64 samples out of 145 were adulterated and this was 44% of the total number of samples. The Gampaha district has shown the highest degree of adulteration and it was 70%.

The level of adulteration in the Kurunegala district was 15%. Colombo city limit, Colombo District excluding Colombo city limits, Kalutara and Puttlam, recorded 40%, 63%, 33% and 20% of adulteration has been respectively. According to the survey, adulteration is being taking place at different places such as at the mills, by agents and retailers.

Based on the findings of this survey, a plan of action has been prepared in order to ensure the quality of coconut oil available in the market. One of the proposals is to revise the current standards of coconut oil, if necessary and make the product certification with the SLS logo mandatory.

The Consumer Affairs Authority has conducted raids on coconut oil mills in the Kolonnawa, Gotatuwa, Negombo, Raddolugama, Battaramulla, Malabe, Kaduwela, Thimbirigaskatuwa and Mabola areas.

During these raids coconut oil samples obtained from the traders were sent to the Government Analyst to get technical reports to confirm whether the samples are adulterated.

Based on the technical reports of the Government Analyst, 23 cases have been filed in the relevant Magistrates Courts and fines of Rs. 54,500 imposed on the errant traders who sold adulterated coconut oil misleading the consumers.

As a Regulatory Authority established to ensure the consumer rights of the Sri Lankan community, the CAA always keeps an eye on traders who try to mislead the consumers by selling sub-standard products.

Chandrika Thilakaratne,
Director, Consumer Affairs and Information, CAA