Adding a “General Safety Provision” to consumer law in Australia (and Japan)?

Japan enacted in 2006 a more expansive version of mandatory accident reporting compared to the Australian Consumer Law regime implemented from 2011, and currently under review. For example, Japan’s system extends to certain specified risks of harm (currently: carbon monoxide emissions or fires) and allows the regulators to make publically available the incident reports received from suppliers.
However, neither country presently has a General Safety Provision (GSP) requiring all consumer goods placed on the market to be reasonably safe. Given persistent problems with product safety failures in both countries, especially in Australia in recent years, perhaps the time has come. The possible enactment of a GSP has been on the agenda in the first five-yearly “ACL Review”, with last month’s Interim Report picking up several arguments related to product safety regulation made in my initial Submission for the Issues Paper earlier this year from Consumer Affairs Australia and New Zealand. Below is an extract from my second Submission (dated 22 November) also available online.

The Interim Report picks up my point that Singapore has introduced a Regulation requiring consumer goods generally to comply with ISO, EU or certain American standards. However, Singapore’s partial GSP is not optimal for Australia:
a. It excludes outright many goods regulated by specific statutes (eg foods). By contrast, Australia has seen recently (eg with the unsuccessful Samsung washing machines and Infinity cable recalls) how important it is for general consumer regulators to be able to step in if specialist regulators cannot achieve good safety outcomes. This is true also with foods (eg the konjac jelly snack partial bans introduced by the ACCC around 2004). The Malaysian full-scale GSP (since the Consumer Protection Act 1999) is better because it allows back-up interventions by the consumer regulators.
b. The Singaporean Regulation allows the supplier to choose the lower standard. A better solution for consumers would be to prioritise standards that have demonstrably more (funded) consumer input, to offset the risk of pseudo-regulatory capture by better resourced industry groups: hence the EU standards, over the ISO and especially American standards.
c. The Singaporean Regulation also makes it hard for a regulator to prove a violation of this partial GSP: it will need to access all three listed standards. There is no requirement for the supplier to declare in advance which organisation’s standard it purports to comply with, if several deal with the same product.
d. Accessing listed standards is also expensive for regulators, responsible businesses, and consumer groups. This is particularly true if Australian Standards were to be listed as an option for suppliers here to comply with. The Western Australian parliamentary report this year is quite scathing of the poor contract negotiated between SA and its (now completely divested, listed) subsidiary SAI in 2003 relating to publication and ongoing development of Australian Standards.
e. The Singaporean Regulation anyway provides no direct sanction for supplying consumer goods that don’t comply with any of the listed organisations’ standards. All the regulator can do is then ban or force recalls of goods it finds to be in violation.
In sum, the better option for Australia is therefore to introduce a full-scale GSP along the lines instead of the EU Directive dating back to 2001. Like the Malaysian Act (and more recent Canadian legislation in 2010), it requires goods to be supplied that are reasonably safe. Unlike the Malaysian Act, the 2001 Directive goes on to list various factors that can help guide assessments by suppliers, regulators and others: EU and national standards, industry codes, general consumer safety expectations (cf also the further factors elaborated in Article 6(1) of the draft EU Regulation of 2013).

Author: Luke Nottage

Prof Luke Nottage (BCA, LLB, PhD VUW, LLM LLD Kyoto) is founding co-director of the Australian Network for Japanese Law (ANJeL), Associate Director (Japan) of the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS), and Professor of Comparative and Transnational Business Law at Sydney Law School. He specialises in international dispute resolution, foreign investment law, contract and consumer (product safety) law.