A revised consumer rights regime was legally articulated in Sri Lanka when the Consumer Affairs Authority Act, No 9 of 2003, (hereinafter referred to as the Act), was certified by the Speaker on 17th March, 2003. The Act replaced old laws relating to consumers such as the Consumer Protection Act, No 1 of 1979, the Fair Trading Commission Act, No 1 of 1987 and the Control of Prices Act.

Many of its provisions, intended to promote effective competition and protect consumers as well as regulate internal trade, are an improvement on the old. Extracts from the Act are published in the Review in order to give readers an idea of what the new law intends to achieve.

However, a continuing critique of the new consumer regime, (from the time that the first draft of the Act was made public in 2001), was that the law does not adequately cater to individual consumers in the country. Equally, it does not set up a satisfactory system of complaints redressal, filtering to the rural areas in Sri Lanka as opposed to central bodies operating in Colombo.

Critics contended that this was in contrast to, for example, India’s Consumer Protection Act of 1986 which establishes not only a Central Consumer Protection Council but also its regional equivalents known as State Consumer Protection Councils. In turn, district forums and state consumer disputes redressal commissions are mandated to come into being, the latter being overseen by a National Consumer Disputes Redressal Commission. In all, the systems of consumer rights supervision are far more detailed than what is envisaged by the Sri Lankan Act.

The composition of these bodies under the Indian Act and supplementary Rules, are also superior to Sri Lanka. District forums in India that investigate consumer complaints are mandated to consist of three members, a District Judge, a person of eminence in the field of education, trade or commerce and, interestingly enough from the perspective of gender equality, a lady social worker.

The state commission to which appeals from a district forum lie, consists of a Judge of the High Court and two other members, (of proven integrity, ability and standing), one of whom shall be a woman. The National Commission, to which again appeal lies from the State Commission, consists of a Chairman who is a Judge of the Supreme Court and four other members, one of whom shall be a woman. An overseeing Central Consumer Protection Council has equal provision for gender representation. Members of the Council may by writing under his or her hand, resign from the Council.

Meanwhile, rules under the Indian Act passed in 1987 stipulate that members of the National Commission be placed in a similar position as Supreme Court judges regarding their conditions of employment and removal from office. Using the 1986 Act to their advantage, activist consumer groups petitioned the Supreme Court of India, a scarce two years following the enacting of the Act, pointing out that the Central Government had not established district forums and state commissions throughout the length and breadth of India as contemplated. In an excellent example of consumer rights activism, the Court directed that the Government fulfill the provisions of the Act.

Sri Lanka’s Act, No 9 of 2003 provides for a Consumer Affairs Authority and a Consumer Affairs Council, the latter functioning primarily as a higher body before which decisions of the Authority could be brought for review. The Colombo located Chairman and ten member Authority shall be appointed by the Minister, subject to the condition that they possess recognised qualifications, have wide experience and are distinguished in particular fields including industry, law and economics. Lesser conditions govern the appointment of the three member Council. The security of tenure of the members of both these bodies is highly unsatisfactory.

As far as the substantive provisions of the Act are concerned, its effective reach is limited to the promotion of effective competition and the regulation of internal trade and the prices of goods and services. Provisions in the first draft relating to the prevention of monopolies and mergers, (wherein a monopoly situation was taken to exist where the supply of goods or services to the market place by a single party exceeds 33.3. per cent whereas a merger is deemed to exist where a party, whether body corporate or not, directly or indirectly, acquires or proposes to acquire any shares in the assets of a corporate or any other person as a result of which, such party would be or would likely to be in a position to control or dominate a particular market), have been taken out entirely from the Act.

However, significantly limited, as it is, the Act does bring about an improved status quo as far as consumer rights in Sri Lanka are concerned. Part 11 of the Act, for example, mandates the Authority to issue directions to manufacturers or traders in respect of price marking, labelling and packeting of goods (Section 10). Failure to obey these directions or the alteration inter alia of any label etc on goods to which such direction applies or the selling/offering to sell such goods, constitutes an offence under the Act. A similar prohibition applies with regard to the selling or offering to sell such goods above the marked price.

Under this Part, (in reference to regulation of trade), the Authority is also empowered to determine standards and specifications relating to goods and supply of services. Complaints against any goods that do not conform to such standards or the manufacture or sale of goods that do not conform to the warranty or guarantee, can be made to the Authority under Section 13 of the Act. After inquiry at which the trader or manufacturer against whom the complaint is being made has a right to be heard, the Authority is empowered to order the same to pay compensation, to replace the goods or to refund the amount paid. Sections 15 to 17 makes refusal to sell goods, the denial of possession of any goods inter alia and the hoarding of goods, also an offence.

Particular powers are meanwhile bequeathed to the Authority and its Director General in respect of goods being sold or services provided at an excessive price or where market manipulation or marker imperfections exist in respect of such goods (Section 19). Such matters could be referred to the Council for investigation and report by the Authority/Director General itself or by members of the public, associations or organisations. Upon the recommendations of the Council, the Authority is enabled to fix the maximum price above which the goods shall not be sold or the services provided (Section 20(5)). An appeal is provided therefrom to the Court of Appeal.

Further sections of the Act stipulate deceptive or misleading conduct and false representations by traders or manufacturers to be an offence. Breach of implied warranties relating to the supply of goods or services is prohibited, with regard to which complaints could be made to the Authority. The succeeding Part 111 of the Act deals with anti-competitive practices.

One interesting feature of the Act is the fact that the term ‘service’ has been defined to include not only services in connection with the supply of goods but also professional services such as accounting, auditing, legal, medical and health, surveying, architecture and engineering. Included in these categories are also the sale and supply of utility services such as electricity, water, gas and telecommunications as well as banking, financing, insurance, shipping and entertainment. The possible impact of the inclusion of these services within the reach of the Act, if effectively utilised by imaginatively dynamic consumer activists in this country, is indeed provocative.

The Review brings some of the provisions of the Act to the attention of its readers. It also publishes an analysis, which reflects on the nature of the consumer movement worldwide and its challenges for consumers in developing countries, including Sri Lanka. Its concluding article examines a facet of consumer rights not much ventilated domestically in relation to genetically modified foods, which debate has, for some time, raged furiously among consumer activists in other countries.

We are also pleased to publish a critique of Sri Lanka’s draft Freedom of Access to Official Information Act which has been engaged in, on our request, by the New Delhi based Commonwealth Human Rights Initiative (CHRI). The draft FOI Act, (published in the LST Review, Joint Issue 192 & 193 [October-November] 2003), is presently undergoing public scrutiny prior to being brought before Parliament.

The Review hopes that these discussions would act as a catalyst in bringing about more rights focussed and people-oriented activist initiatives in Sri Lanka both in relation to consumer rights and the right to freedom of information in general.


Kishali Pinto-Jayawardena