Consumer Protection in Sri Lanka
By Mathuri Thamilmaran
he protection of consumers from illegal trade practices and fraudulent shopkeepers has been a key concern of successive governments, especially since Sri Lanka is still a developing country that is heavily reliant on its agricultural sector. Regulations relating to consumer protection in Sri Lanka was first enacted during the Second World War, where as a British colony Sri Lanka (then named Ceylon) saw a scarcity of essential food items, and legislation was enacted to control food availability and their prices. These laws allowed for a distribution scheme of essential rations being handed out to the public for fixed prices that did not fluctuate.
These regulations were in force till 1950, when both the Price Control Act and the Food Control Act were passed. Various other regulations continued to be in existence in order to maintain the market prices of essential items. In 1977, the election of the United National Party on a platform of open economy brought in the ‘Free Open Market Competitive Economic Policy’ of 1977. In 1979, the Government enacted the Consumer Protection Act of 1979, which laid down the rights of consumers, provided for punishment to offenders, and allowed for compensation for aggrieved consumers. The Internal Trade Department implemented the provisions of this Act. 1987 saw the establishment of the Fair Trading Commission by the Fair Trading Commission Act No.1 of 1987. This Commission had a mandate to deal with monopolies, mergers, and anti-competitive practices, as well as the regulation of price fluctuation of certain goods.
In 2003, once again with a UNP government in power, the state introduced the Consumer Affairs Authority Act No. 9 of 2003. This Act repealed the previous Consumer Affairs Act (1979), the Fair Trading Commission Act (1987) and the Control of Prices Act (1950). The Consumer Affairs Authority Act established two institutions: The Consumer Affairs Authority and the Consumer Affairs Council. The Consumer Affairs Authority was the successor for both the Internal trade Department and the Fair Trading Commission. The Consumer Affairs Authority (CAA) is the main institution established by the Act and falls under the Ministry of Trade Commerce, Consumer Affairs & Marketing Development. It consists of a Chairman and not less than ten members appointed by the Minister of Consumer Affairs. The Consumer Affairs Council consists of three members appointed by the Minister of Consumer Affairs and in administrative terms the Council functions under the CAA. It has powers to make determinations on issues referred to it by the CAA mainly on anti-competitive issues. The Council can also investigate other issues referred to it by the CAA and make recommendations to the CAA.
The CAA is vested with wide powers including overall supervisory power, powers to regulate trade and to enter into written agreements with manufacturers. The CAA also has the equivalent power of the District Court in determinations made on consumer complaints. The objectives behind the establishment of the CAA were to protect the consumer against goods and services which are hazardous to life and property. The need to protect consumers from unfair trade practices and to ensure that their rights are fully protected was the main idea for the creation of an all-encompassing CAA. The CAA has to ensure that goods are available at competitive prices and that consumers are not exploited. The Authority also has powers relating to the regulation of internal trade and issues general directions on labeling, price marking, packaging, manufacture and sale of any goods.
The CAA can enter into agreement with a manufacturer or supplier of goods in order to set a maximum price that goods can be sold and to provide other conditions such as manufacture, supply, storage, transport, distribution, marketing, labeling etc.[1]
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