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Monday April 17, 2017

Australian Commission Recommends Product Safety Changes

Further control of product safety at the national level in Australia is among the recommendations made available April 12 by that nation's Productivity Commission. The advice stems from a 2016 request by the commission (PSL, 12/12/16) for input on the enforcement of the Australia's Consumer Law (ACL). That request, itself, was a follow-up to a wider inquiry issued earlier in the year (PSL, 4/11/16) and begun in 2015 (PSL, 12/7/16). In the new report (bit.ly/2o6roNC) the commission recommended:

"The state and ACT governments should relinquish their powers to impose compulsory recalls or interim bans. This would signal that it is the commonwealth’s responsibility to immediately respond to all product safety issues that warrant a compulsory recall or ban.
In parallel with any such change in responsibilities, there should be a mechanism for state and territory governments to raise and provide input on product safety matters to the Australian Competition and Consumer Commission (ACCC) that they consider would warrant a compulsory recall or ban."

Nonetheless, the report noted that Australia's system of split oversight between ACCC and state-level agencies "appears to be operating reasonably effectively given the intrinsic difficulties of having 10 regulators administer and enforce one law."

 

Still, it acknowledged that "the multiple-regulator model allows for differences among jurisdictions in approaches to aspects of their administration and enforcement of the ACL, which likely create some inconsistent outcomes for consumers and for businesses."

 

Thus the commission called for "enhanced performance reporting requirements," including metrics like expended resources, activities by the various agencies, measurements of changed behaviors, and review of other effects of regulators' actions. Additional advice involved:

  • Electrical Products: There needs to be more consistency among regulators. The report noted "unnecessary divergence" and slowness in transferring duties to the national government as envisioned in the ACL update in 2011 and urged at least as far back as 2008.
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  • Alternative Dispute Resolution: The national and state governments should sponsor an independent review of current options and practices, including aspects like unmet needs, jurisdictional differences, consistency goals, and authority to compel such negotiations.
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  • Penalties: The report stated there is "a strong case" for increasing maximums under the ACL. The issue is balancing abilities of small companies to pay but ensuring punitive effects on larger. An idea (PSL, 12/12/16) is to let regulators choose among maximums of AUJ$10 million, three times the benefits derived from a violation, or (if the benefit is unknowable) 10% of annual turnover in the 12 months preceding the assessment. There also could be an increase in personal liability to AU$500,000. Since 2001, maximums have been AU$1.1 million for companies and AU$220,000 for individuals.
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  • National Database: This could cover complaints and incidents. The commission noted that its 2008 suggestions for development "faltered for a number of reasons, associated with IT interoperability, taxonomy and, ultimately, a lack of funding."
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  • Better Public Data: Related to the database, the report pointed to needs to ensure that reports, at a minimum, include filtering to "ensure…legitimacy," sufficient details, information on resolutions, and context like number of incidents versus sales volume.
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  • Enforcement Tools: There is a need to ensure all regulators have full access to the options developed in recent years. Some state governments still need to give their regulators powers allowed under the ACL. The report used an example of issuing and publicizing infringement notice, which is an area that some jurisdictions have weaknesses. On the other hand, the report pointed out that some jurisdictions go beyond the powers in the ACL.
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  • Interim Bans: Need for regulatory impact statements can slow these at the national level while states can move faster. The report urged balancing the needs to ensure such actions are necessary with protecting safety. It pointed to responses to hoverboards as an example of the "hurdles."
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  • Consumer Powers: The report urged attention to areas like consistent access to redress options, better policy development research, and advocacy education.