1. About Enewsletter

Consumer Watch Newsletter is a joint initiative of the Consumer Unity & Trust Society-Africa Resource Centre (CUTS-ARC) and Zambia Consumer Association (ZACA), published with the objective of enhancing consumer welfare through sensitisation, information dissemination and capacity building of consumers, business entities and the government. While addressing consumer concerns, the newsletter will focus on bringing out issues such as violation of consumer rights and measures to be taken by the relevant authorities to protect stakeholders.

With this in mind, CUTS-ARC and ZACA felt it was important to begin a periodic newsletter to disseminate information on matters affecting consumers and the importance of consumer protection law and its existence in the economy.

It is a well-known fact that Zambia does not have a comprehensive consumer protection law, despite having started the process since 1994.  However, general complaints by consumers are normally handled by the Zambia Competition Commission (ZCC), a Government agency mandated to check unfair trade practices in the country.

CUTS-ARC and ZACA will strive to support and lobby the Government and stakeholders to ensure resumption of the process to eventually enact a functional Consumer Protection Law in the country and also establish a functional institutional mechanism to implement the law. This is in line with the changes taking place in other countries in the region, in the wake of globalisation and liberalisation. Apart from carrying consumer-related information, the publication will also give an analysis of current consumer concerns in the country.

Editor

2. BUYER'S BEWARE

Did you know that, as a buyer and consumer, you have rights? Do you know that you can seek redress on consumer abuse and you also have the right to return defective goods? Do you know that a new law on consumer protection is on the cards in Zambia?

The liberalisation of the Zambian economy during the 1990s witnessed an influx of cheap, but poor quality, foreign goods. Though many consumers have rushed into buying the so-called cheap goods, these goods have proved to be expensive in the long run. When these goods fail to perform, many traders refuse to refund or exchange such defective goods. A cursory glance at most shops in Lusaka’s Kamwala shopping complex, COMESA flea market and the Town Centre market attests to the attitude of most traders. Billboards such as ‘goods once bought can not be returned or refunded’are common and these writings can largely be attributed to the attitudes of traders in Zambia towards consumers.  In this context, one wonders whether Zambia has effective and efficient institutions that protect consumers, let alone a consumer protection law. Interestingly though, many traders have continued to abuse consumers, in spite of the existing law. Section 12 of the Competition and Fair Trading Act, Cap 417 of 1994 gives consumers the right to purchase, transact or contract and demand for a refund if any of the provisions under that section is breached. This law entails that consumers are entitled to seek redress for any wrongdoing committed against them by any trader in the market place.

Consumer Rights under the Competition and Fair Trading Act

Consumers in Zambia are entitled to five types of rights or protections namely: -

• The right to safety: consumers should be protected against marketing of goods that are hazardous to life.

• The right to be informed: consumers should be protected against fraudulent, deceitful or grossly misleading information, advertising, labelling or other practices and to be given the facts to make an informed decision.

• The right to choose: consumers should be assured, wherever possible, access to a variety of products and services at competitive prices in industries where competition is not feasible and government regulation is substituted, to be assured of satisfactory quality and service at a fair price.

• The right to be heard: consumers have a right to be assured that their interest will receive full and sympathetic consideration in the formulation of government policy and fair and expeditious

• Treatment in their administrative structure.

• The right to a clean environment: consumers should be assured that the supplier of goods and services would not pollute or destroy the environment.

  Source:   Zambia Competition Commission, A Guide to Consumers

2.1 Consumer Responsibilities 

Though the consumer has the above-mentioned consumer rights, he/she is expected to take certain precautions when purchasing items.  For instance, he/she should make the right purchase decision, inspect goods carefully, compare quality and price, ask for product and warranty details from the seller and keep all invoices and receipts after buying the items. It must be noted, however, that the Competition and Fair Trading Act (1994) aims to give both consumers and sellers a fair deal. The Act is not designed to protect consumers, if they are careless or unreasonable in their demands.

Thus, depending on the case, consumers can be compensated for any misrepresentation, shoddy goods or unsatisfactory services. When there is a breach of the Act, other practical remedies such as replacement or repair could be agreed between the parties. A number of consumers have been exposed to various trade malpractices, profiteering takes the centre stage at the expense of service provision. The Zambia Competition Commission (ZCC), a national institution charged with the responsibility of educating and receiving consumer complaints, has found out that there are times when consumers encounter problems in the market place. They normally do not know whom to approach to raise their concerns, or may never even bother to report their grievances at all.

The ZCC exists for consumers and, as such, consumers are free to approach the Commission about any of their grievances. Consumers are, therefore, encouraged to make use of the Commission and its competent officials. Other bodies with which consumers can lodge their complaints about abuse or service dissatisfaction include the Road Traffic Commission (handles complaints about bus fares), the National Water Sanitation Council (handles complaints about water), the Communication Authority (handles complaints about communication-related issues), the Zambia Bureau of Standards (handles complaints about defective products) and the Ministry of Health/Local Councils (handles food-related complaints). Zambia Consumer Association (ZACA) also handles consumer complaints through post, e-mail, phone or visit to their offices. It should, however, be noted that, as much as the consumer has the right to complain against unscrupulous business practices, the trader also has the right to be protected against frivolous claims.

2.2 Recent Efforts

In order to effectively check consumer abuse, Zambia is in the process of enacting a comprehensive consumer law so that consumers can be well protected against unfair business practices.  At present, most laws in this respect are sector-based and, thus, do not cover the consumer adequately.  This means that a comprehensive consumer-specific legislation is needed.
Snapshots of Sector-specific Laws in Zambia

According to Sharon Williams, a Legal Officer with the Zambia Law Development Commission, the new law provides guidelines to consumers on how to deal with a trader or service provider who violates the stipulated conditions, and shows how to seek compensation and redressal.  Williams adds that, though there are institutions in Zambia that aim at protecting consumers such as the ZCC, the Zambia Bureau of Standards, the Assize Department, etc., such bodies lack enough manpower, financial resources and jurisdiction powers to impose any fine on a business that fails to refund, repair or replace a product when there is a legitimate claim (under the existing Act) from a consumer. In addition, experience shows that the ZCC has been dealing more with cases of competition law and market behaviour of companies, in terms of mergers, acquisition, cartels, etc., than consumer protection cases.

 To this end, a new body will be vested with the power to mediate, litigate on behalf of the consumer and also monitor retailers, suppliers and manufacturers so that they respect consumers. Under this law, impediments such as the slow judicial process and high legal fees that discourage consumers in bringing offenders to the law will be dealt with.

Moreover, law exclusion clauses will be void or not have legal backing under this law.  Notices and clauses that infringe on consumer rights will not be acceptable to the consumers. The existing tendency of both the traders and the suppliers to pass on the liabilities of defective goods to the consumer will not be tolerated under this law, unless the supplier or trader provides proof that the goods did not have manufacturing defects.  Furthermore, to ensure that both the suppliers and the traders are also protected, and that the consumer is held responsible, the consumer will also be required to prove that, through no fault of his/her own, the failure of the product to perform is because it is not of mercantile quality. However, consumers will have to be careful against frivolous claims

2.3 Cautions Against Misleading Advertisements!

Consumers should be wary of advertisements, by being critical and guarding against persuasive notices that can lead them into making unnecessary purchases. Remember to exercise the right to choice. As a consumer, one must question the price and the quality of products, so as to get value for money. Always remember to budget wisely and use whatever financial resources at your disposal carefully. Buy quality by exercising your rights. Remember, it is the duty of the ZCC, other sectoral regulatory bodies and the consumers to work towards improving the quality of products for the users. However, this can only be done if consumers and the watchdogs, in this case, the ZCC, the ZACA, the ZABS, to mention but a few, work together.

3. Are Consumers Protected Under The Marketing Act?

Marketing professionals are intermediaries between consumers and retailers or suppliers and manufacturers. Marketing professionals are guided in their work by the Marketing Act. The 2004 Marketing Act has brought the Zambian marketing professionals and institutions under public scrutiny in terms of conduct and responsibility.  The question that now remains untackled is what does this mean for the Zambian society and precisely for the consumer? The other is to what extent was the consumer taken into consideration during the legislation formulation process? 

The Marketing Act, in its preamble, is silent on what the Zambia Institute of Marketing (ZIM) will aim to achieve for the society (consumer), as a basis for its existence. This is fatal because every organisation should have a mission, between itself and the broader society. No doubt it is the seller’s document and not a marketeer’s. In this case, a group of professionals have congregated into an association but have not made it clear what they want to do for society (consumer). Because of this, the Zambia Institute of Marketing functions are not reflective of the deliverance of the mission, which is missing, and hence they are there as self-serving instruments.

The only function that nears consumer protection is function number 4(f) of the Act that talks of ethical conduct of professionals. However, the term “ethical” remains undefined in the Act. Apart from craving to be an elitist grouping, the ZIM’s clause on membership disqualification cannot be distinguished from that of a political party! This originates from the lack of a mission and, hence, aiming for jobs in the sky. This will never develop Zambia and serve the people, i.e., the consumers, to whom ideals ought to be linked.  Attempts to get a response from the ZIM on this have proved futile. Anyhow, the debate must start, here and now.

4. Ever Rising Costs of Fuel Affecting Consumers

In just three months, in the last quarter of 2004, Zambia experienced three fuel price hikes. The rising cost of fuel in the country has undoubtedly resulted in many social and economic ramifications. Given the country’s vulnerability to the world economy, Zambians are likely to suffer similar price increases in the not too distant future. The recent fuel increases come in view of the Energy Regulation Board (ERB), an agency that regulates the energy industry in the nation’s need to keep in tune with international oil prices.  The ERB has now embarked on reviewing the fuel prices every second Wednesday of the month, in relation to the current costs of oil at the international, scene using the Import Parity Pricing (IPP) mechanism. In Zambia, when there is a price hike of fuel, the pump prices rise immediately.  On the other hand, when the prices are reduced, when so directed by the ERB, it will take several days before the dealers comply!

Oil prices on the international market have been rising on the cost per barrel and this has had negative effects on the Zambian economy, especially on consumers. This is so because the increase in fuel prices means that the price of every conceivable commodity has skyrocketed, as all producers who manufacture such essential goods also use fuel. Thus, overhead costs for manufacturers have also increased due to higher transport costs. To this end, manufacturers and transporters have been increasing on costs of their goods and services, respectively, following the hiking of fuel costs.

Zambian consumers have been worst hit in the transport sector. In order to meet their targets, transporters have passed on the high fuel costs to consumers by increasing bus fares. For example, those who travel by bus within Lusaka are now paying almost twice as much as they used to pay three months ago. Apart from increasing fares, transporters, that is mini bus operators, have been cutting distances into segments in some routes before reaching the town centre, thus doubling-up the fares paid, despite Zambia Consumer Association appealing to the Government to intervene in the matter. Regrettably, the trend has continued even when some buses have been impounded by the authorities. 

This situation is pretty bad, especially when one considers the salary and income levels of the majority of people in Zambia. Thus, the latest fuel hike will mean thousands more Zambians will be forced to go without food and travel on foot, adding another level of sufferance to their daily grind. It is for this reason that the Government is working on modalities of securing an alternative, cheaper source of fuel. These hikes in the price of fuel have undoubtedly ignited unrest in the labour sector, with most workers possibly opting for industrial action to force employers to award substantially high wage rises to track inflation. Any substantial increase in the price of fuel in future would be very, very inflationary, with prices going up across the whole country.

Considering the landlocked geographical position, even Zambian exports have been affected, as they are more expensive, compared to goods produced in other countries. The already bad situation for the manufacturing sector will be made worse, especially when the proposed tariff hike is effected by the Zambia Electricity Supply Corporation (ZESCO) in the commercial category.  This intended upward adjustment in electricity tariffs, coupled with fuel increases, will adversely affect the performance of the manufacturing sector and ultimately the exports.

Fuel price hikes have badly affected consumers and companies already struggling to keep their heads above water.  Though one can argue that the prices of fuel have started going down, the benefits have not trickled to the consumers, considering the fact that the prices of consumer goods have remained the same, inspite of the reduction in the pump price of fuel by almost 13 percent. Thus, the recent fuel price decreases have not necessarily translated into additional savings for consumers, as the bus, taxi and other commodity fares have remained the same. It appears bus fare structures are only reviewed whenever there is an increase in the cost of fuel and not when there is a decrease.

The rise in oil prices has raised concern among consumers, who feel that the oil marketing companies are operating like cartels, hiking prices whenever international prices go up, but failing to effect commensurate reductions when international rates go down. It is public knowledge that when it comes to effecting upward adjustments, oil-marketing companies do this immediately but there is a tendency to delay this whenever consumers expect reduced prices. Over that, the ERB only monitors oil marketing firms to ensure that they reduce the pump price for fuel whenever there is a decrease but does not intervene to ensure that there is a corresponding reduction in other consumer goods as well.

However, even if the new fuel prices are effected, the prices of most goods and transportation remain the same. Thus, in the mean time, consumers have to dig deeper into their pockets to meet high production costs accruing from increased prices. The big question perhaps is who should be responsible for ensuring that consumers receive benefits from fuel reduction?

5. Corporate Social Responsibility - What Does It Mean?

Corporate social responsibility means different things to different organisations and people. To this end, different organisations have framed different definitions – although there is considerable common ground between definitions. Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of life of the workforce and their families as well as of the local community and society at large. The private sector today has assumed a significant role in Zambia and the world over, since society at large looks to them for answers to contemporary social and economic issues.  This is due, in part at least, to the increasingly diminishing role of governments in business.

In Zambia, the privatisation of parastatals, spearheaded by the World Bank (WB), the International Monitory Fund (IMF) and the donor community, is a means of bringing about economic efficiency and new investment. In reality, however, despite all the talk about corporate social responsibility, the private sector did not take up the social responsibilities of the parastatals. Thus, this added pressure on the Government to fill the gap that was left by the private sector. The failure of the private sector to embrace corporate social responsibility (CSR) can be evidenced in the Copperbelt, as per the example cited below:

Since the inception of privatisation, Zambia has witnessed a fall in the standard of sports, educational, health and many other social services, mainly due to the fact that many of the essential services, which were supported by parastatals, are no longer receiving the same support from the private sector.  The private sector has concentrated on making profits, without embracing the social responsibility aspect.  Interestingly, CSR has become a hot issue lately in Zambia. More companies in Zambia today, than ever before, are now engaged in serious efforts to define and integrate CSR into all aspects of their business, with their experiences being bolstered by a growing body of evidence that corporate social responsibility has a positive impact on business economic performance.

In the telecommunication sector, the two private mobile telecommunication providers, namely, Telecel and Celtel, have been involved in community projects, as commitment to the fulfilment of their social responsibilities.  For example, Celtel, in partnership with the Ministry of Health, as part of its fulfilment of social responsibility, has donated blankets, bed sheets and mosquito nets to health Centres.  In its quest to ensure that Zambia’s cultural heritage is preserved, Celtel has been in the forefront of helping in the organisation of different ceremonies in different parts of the country annually.  In the sports sector, Celtel has scored a number of successes, with the recent donation of US$7000 to the Woodlands stadium in Lusaka, aimed at ensuring the proper running of soccer at the stadium. Celtel has also been instrumental in sponsoring minor sports, such as polo, and in 2004 Celtel co-sponsored the motor rally championship.  In order that the fight against the dreaded HIV and AIDS is won, Celtel and Telecel have started 24-hour counselling for the people. This is being done in partnership with an organisation called LIFELINE.

6.  Zambian Journalist Wins Kalam Consumer Media Award 2004

Independent Journalist and correspondent for the Africa Woman Newspaper, Brenda Zulu, made history in January 2005 by becoming the first journalist to win the coveted Kalam Consumer Media Award.  She received the award for her article called “Tele-health Set to Boost Maternal Care”, first published in the Africa Woman Newspaper and reproduced in Zambia, Zimbabwe, Malawi, Nigeria, Ghana, Uganda and Tanzania.  Brenda received this award at a colourful gala dinner hosted by the Ministry of Trade and Industry of Botswana at the Grand Palm Hotel Casino Resort in the Botswana capital Gaborone.

The reception was hosted in honour of more than 60 delegates from Trade Ministries and Consumer Organisations attending the “Regional Dialogue on Consumer Protection Policy” conference from 7^th to 11^th February 2005, organised by Consumers International, Regional Office for Africa (CI-ROAF).  Brenda received a cash price of US$500 and a Dell laptop computer to go with her prestigious award, presented to her by the Minister of Trade and Industry, Neo Moroka.

A jubilant ZACA Executive Secretary, Muyunda Ililonga, congratulated Brenda and said, “When I saw her lift-up that award, my spirit was lifted up too.  It was a great encouragement to our work on consumer protection in Zambia.  I’m really proud that a Zambian Journalist has driven the consumer agenda in Africa this far”.

The Kalam Award celebrates excellence in consumer journalism. The award acknowledges African Journalists’ best productions and seeks to encourage the publication and reporting of impacting articles on consumer issues throughout Africa.

Contact Us
Consumer Watch Newsletter: Composed, published and distributed by: -
Consumer Unity & Trust Society – Africa Resource Centre (CUTS-ARC)
4^th Floor, Main Post Office Building, P.O. Box 37113,
Cairo Road, Lusaka, Zambia,
Ph: 260.1.22 4992, Fx: 260.1.22 5220,
E-mail: lusaka@cuts.org
Web Site: www.cuts-international.org

and

Zambia Consumers Association (ZACA)
Suite 91, 2^nd Floor – Afcom House Building,
Corner of Obote / Zambia Way Avenue
P.O. Box 21641, Kitwe, Zambia,
Telephone:  +260 2 224193, Fax:  +260 2 224193
Mobile:  +260 97 800018 / 095 910691 / 095 910692,
E-Mail: zaca@zamnet.zm

The news/stories in this Newsletter are compressed from several sources. The sources given are to be used as a reference for further information. CUTS-ARC and ZACA gladly welcome comments, suggestions and contributions from our esteemed readers.