The Australian Consumer Law contains no express prohibition from selling unsafe products, including from knowingly doing so. I believe it is important to examine the need for a general safety provision to remedy this situation.
A general safety provision (GSP), as set out in the Productivity Commission’s review of the consumer product safety system 2006, entails the creation of an explicit legal obligation to market only ‘safe’ products.
Mandatory standards and bans exist for a modest number of product categories, but these are essentially a reactive approach to consumer safety. A more proactive approach to product safety policy/legislation by way of a GSP can be valuable. A range factors inform such consideration, including:
Changes in the consumer market
The Australian Competition and Consumer Commission, as product safety regulator has expressed concern, for example, about the trend towards direct sourcing of less expensive products from overseas by retailers of fast-moving consumer goods (FMCG). These are goods that sell quickly and for a relatively low cost and include goods such as some electronic goods that have become cheaper and until recently were not in this category. The ACCC has reported an increase in consumer injuries and a sharp increase in the number of recalls of FMCG products.
A number of other trends are impacting the nature of consumer markets and the safety of products:
- increasingly globalised manufacturing and markets
- increasingly price driven competition
- international regulators networks with greater information sharing
- heightened focus on chemical safety in product
- ever-expanding product ranges
- growing online retail and auction sales
- trends toward product customisation
- more educated consumers with higher product expectations
- evolving product technology – more products incorporating
Such trends make it all the more difficult for governments to monitor and influence the safety of products on an operational basis. They also create challenges for individual businesses trying to ensure safety as a ‘voluntary’ measure. A legislative requirement for safe products that applies across the product supply chain is likely to have a stronger impact, providing incentive at all levels and better leverage for governments and businesses alike.
New case law
In the Woolworths case run recently by the ACCC (ACCC v Woolworths Ltd 2016 FCA 18), the Court declared that the retailer/importer breached the ACL’s misleading and deceptive conduct provisions by selling unsafe products after it had become aware of safety concerns.
This case has created precedent which serves a similar purpose to a GSP, but while it has established application to product safety in certain respects, it does not provide the clear unambiguous requirement for unsafe goods that a GSP would do.
A key element in product safety policy is the message that’s conveyed to the business community. Without a GSP, suppliers of most products are far less aware of safety and have far less incentive to give safety priority over business costs and other practical factors.
Compared with 2006 when the Productivity Commission considered a GSP, the product safety resources available to suppliers are now substantially improved. Resources now include the ACCC’s Product Safety Australia website, as well as ISO standards on supplying safe products and product recall; a series of ISO Guides; and Standards Australia’s Product Safety Framework: Handbook 295. Such material provides access and guidance to all suppliers, facilitating safety in all consumer goods.
Having a GSP in the ACL could engender a much higher awareness of product safety across all suppliers and provide clear motivation to only design, source and supply safe products.
For further discussion on the GSP, see my later blog articles Should it be illegal to sell products that are listed recalls? and Is a recaller breaching the law if they continue to supply their product?