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Legislators debate draft consumer protection law

CAIRO: The People s Assembly gave its in-principle approval earlier this week for a draft consumer protection law. The approval is the first step toward passing the law and legislators have been debating the clauses for several days. Hesham Ragab, deputy minister for legal and legislative affairs at the Ministry of Trade and Industry, tells …

CAIRO: The People s Assembly gave its in-principle approval earlier this week for a draft consumer protection law. The approval is the first step toward passing the law and legislators have been debating the clauses for several days. Hesham Ragab, deputy minister for legal and legislative affairs at the Ministry of Trade and Industry, tells The Daily Star Egypt that he expects the law to be finalized either this week or soon after next week s parliamentary recess.

The law is based on guidelines created by the United Nations in 1999 as part of its efforts to disseminate expertise on sustainable development policies. The guidelines set out general principles which form the basis of consumer rights and the roles and the responsibilities of the government, manufacturers and distributors.

The key aspects of consumer rights that are protected by the law include health and safety, the provision of sufficient information to allow consumers to make informed decisions and the right of return or exchange in the event of defects or if goods or services fall short of their specifications.

The law has been strongly backed by Minister of Trade and Industry Rachid Mohamed Rachid since internal trade was added to his portfolio during the last cabinet reshuffle in December.

The consumer protection law … confirms the government s commitment to protecting the Egyptian consumer and guaranteeing his rights, says Rachid in a statement, considering [the consumer] as central to economic activity and the most important link in its chain.

Rachid adds that the law incorporates consumer rights into a broad legal framework for the first time in Egypt. A law is necessary, explains Rachid, because the consumer is generally the weaker party in commercial relationships.

The consumer protection law, however, will augment existing statutes that safeguard the rights of buyers.

This law is not everything about consumer protection, explains Ragab. In Egypt, we have [approximately] 60 different statutes which all work to achieve [the] same goal of protecting the consumer. But this new statute has 10 very important new obligations on producers, wholesalers and the like.

Ragab explains that the right to return or exchange a defective product is one of the most important facets of the law. Furthermore, unlike other countries, the law considers a violation of its provisions to be a criminal rather than civil offense.

We have in the new draft a very powerful approach to protect the consumer here in Egypt, says Ragab, because we have criminal sanctions in case there is a violation of the articles of this law.

The provisions of the law apply to both goods and services. This is an important step towards providing a comprehensive legal framework for protecting consumers, says Rachid.

However, the law was criticized by the Egyptian Center for Economic Studies (ECES) in a paper published last month for failing to adequately protect consumer rights with respect to after-sales service. This point was also raised in parliament.

Ragab believes that this criticism is the result of a misunderstanding of the Anglo-Saxon legal tradition, which is increasingly being used for commercial laws in Egypt and defines all terms in the first article of the law. The term product is defined in a manner to include both goods and services, according to Ragab, and the latter is referred to in a manner that encompasses services rendered at any stage.

Another concern raised in the ECES paper is that the law does not explicitly mandate the seller to provide a receipt in all circumstances. Ragab disagrees with this assessment, adding that the contents of receipts will be detailed in subsequent executive regulations.

It s an obligation on producers and anybody who trade in products and services, says Ragab, that they give consumers a receipt that should include a lot of material data that will be identified by the implementing regulation.

In terms of implementation, a central authority will be created to act as the executive arm of the law. This authority will be responsible for monitoring defects and pursuing cases of violations.

In addition to the central authority, Rachid explains that the law recognizes the role of civil society in defending consumer rights. Numerous non-governmental consumer protection associations already exist, and these will have six representatives out of a total of fifteen on the board of the central authority.

The approach all over the world is that it is very difficult to protect consumers only by government authorities unless civil societies are completely engaged, says Ragab. Because, when you talk about consumer protection, the first thing is to raise the awareness of consumers about their rights then to support their claims and rights. And they need to feel that the government and civil society are backing them, then they will be encouraged to have their voice heard and they ll not leave the producers and traders to cheat them.

The law also gives civil consumer protection associations the power to file civil legal complaints on behalf of individuals. This effectively introduces an opportunity for class action lawsuits by consumers, whereby several individuals may file a single legal complaint against a seller and seek collective compensation.

There is no special chapter in the civil procedure law about class action [lawsuits], explains Ragab, unlike the situation in other countries. But there are some scattered provisions in different laws, and now one of them will be the consumer protection law.

Ragab also describes the cooperative environment during the ongoing debates in parliament.

The trend of most of the MPs in the Shura and People s Assembly is that they have been waiting [for the law] and are very anxious to support any provision that would provide more protection for consumers, says Ragab. Even producers that are represented there through MPs understand that the ultimate benefit of the law will go to them, because whenever consumers are confident that they will get the right product that really accommodates their needs, it means more trade and that would be to the benefit for producers in the end. So we didn t feel that there is, as usual in such kind of law, [an attitude of] consumer versus producers; we didn t feel that kind of lobbying.

Topics: FJP

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