The Competition and Consumer Act 2010, also known as the Australian Consumer Law (“ACL”) came into effect on 1 January 2011. The ACL deals with various aspects of the relationship between a consumer of goods or services and providers of goods or services. One of the significant issues introduced by ACL was a nationally consistent system to regulate the safety of consumer goods and product related services.
Who is a consumer & what are product related services?
A person is a consumer of goods or services if he/she:
- purchases goods or services costing less than $40,000; or
- in case of goods or services costing more than $40,000, purchases goods or services which are ordinarily acquired for personal, domestic or household use or consumption (for example, a car, a washing machine, electrician’s or plumber’s service etc.); or
- a purchaser of a commercial road vehicle so long as the person did not acquire goods, or hold himself or herself out as acquiring goods, for the purpose of re-supply or for the purpose of using them up or transforming them, in trade or commerce, in the course of a process of production or manufacture or of repairing or treating other goods or fixtures on land.
Product related services include the installation, maintenance, repair, cleaning, assembly and delivery of consumer goods, or any other service that relates to the supply of consumer goods. This definition encompasses services provided by builders or any other trades persons involved in housing construction who install or assemble appliances/goods which form a part of the structure of the house.
All participants in the supply chain of consumer goods (like manufacturers, wholesalers, retailers etc.) and product related service providers (builders, cabinet makers, electricians etc.) are required to comply with the product safety requirements under the ACL.
Safety of consumers under the ACL
Part 3–3 and 3–4 of the ACL provides a framework for regulating safety of products sold in Australia. The ACL empowers the Commonwealth and responsible State and Territory ministers to regulate consumer goods and product-related services by:
- making mandatory safety standards;
- issuing safety warning notices;
- issuing temporary or permanent ban on products; and
- issuing compulsory recall notices to suppliers.
The Commonwealth Minister may make safety standards about the following matters to prevent or reduce risk of injury to any person:
- the performance, composition, contents, methods of manufacture or processing, design, construction, finish or packaging of consumer goods of that kind;
- the testing of consumer goods of that kind during, or after the completion of, manufacture or processing; and
- the form and content of markings, warnings or instructions to accompany consumer goods of that kind.
Safety Warning Notices
The Commonwealth and responsible State and Territory ministers may publish a warning notice about specific consumer goods or product related services. The ministers are under no obligation to consult or advise the importer or manufacturer of the goods before publishing the notice.
The notice may comprise statements that the consumer goods/product related services are being investigated to ascertain whether:
- they will or may cause injury; or
- a foreseeable use (including misuse) will or may cause injury; or
- a warning of the possible risks with using the consumer goods needs to be issued.
The results of any investigations must be published as soon as possible after the investigation is complete especially if no interim ban or recall notice has been issued. The responsible minister may publish any action which is proposed to be taken in relation to the goods or the product-related services.
An information standard for both goods and services may be made under the ACL by either:
- the Commonwealth minister making the information standard and publishing it on the internet; or
- declaring that a certain standard made by Standards Australia or any prescribed body is recognised as an information standard under the Act.
A supplier of goods or product related services is prohibited from selling within Australia goods or services which do not comply with information standards under the ACL.
The ACL may impose pecuniary penalties on persons selling goods or services which contravene the information standards.
The ACL contains provisions dealing with interim bans and permanent bans on the supply or manufacturing of goods and product related services.
Interim bans may be made by either the Commonwealth minister or responsible State or Territory minister if it appears to the responsible minister that:
- consumer goods or product related services will or may cause injury to any person; or
- a reasonably foreseeable use (including a misuse) will or may cause injury to any person; or
- if another responsible minister has imposed an interim ban and that ban is still in force.
Interim bans usually last for 60 days, but they could be extended.
A permanent ban can be only be imposed by the Commonwealth minister. The pre-requisites for an interim ban and permanent ban are similar.
It is an offence to sell or supply or offer to supply or manufacture or possess banned goods.
The ACL recognises two types of recalls: compulsory and voluntary.
Compulsory recalls are initiated by the Commonwealth minister or responsible State or Territory minister. Voluntary recall may be initiated by the manufacturer or supplier.
A product or service is recalled if it presents a safety risk to the consumers.
The ACL may impose pecuniary penalties on persons selling goods or providing services for recalled goods.
Keeping up-to-date with the Act
The safety standards, bans or recalls are published on the internet and all suppliers of goods and product related services must keep up-to-date with the law to ensure compliance with standards or bans. Suppliers of goods and product related services can find these notices on www.productsafety.gov.au. Suppliers can subscribe for email updates about Australia’s list of mandatory safety standards and bans.
Mandatory reporting and safety standards
One of the key changes introduced by the ACL is imposing a mandatory reporting requirement on the suppliers of goods and product related services.
If a supplier of goods or product related services becomes aware of death, serious injury or illness of any person and:
- considers that this incident was caused, or may have been caused, by the use or reasonably foreseeable misuse, of the goods or services; or
- becomes aware that a person other than the supplier considers that the incident was caused, or may have been caused, by the use or reasonably foreseeable misuse, of the goods or services,
the supplier has to provide written notification to the Commonwealth minister within two days of becoming aware.
The reporting obligation does not apply if:
- it is clear that the death or serious injury or illness was not caused by the use or foreseeable misuse of the consumer goods; or
- it is very unlikely that the death or serious injury or illness was caused by the use or foreseeable misuse of the consumer goods; or
- the supplier, or another person, is required to notify the death or serious injury or illness in accordance with another Commonwealth or State law that is specified in the regulations; or
- the supplier, or another person, is required to notify the death or serious injury or illness in accordance with an industry code of practice which applies to the supplier or other person and is specified in the regulations.
The ACL may impose pecuniary penalties on persons failing to comply with the mandatory reporting obligation.
Tips to ensure compliance with product safety regulations
- keep up-to-date with the safety standards, bans and notices published by the Commonwealth, State and Territory governments;
- comply with the reporting obligations if you become aware of death or serious injury or illness caused due to use of any consumer goods;
- sell or use products which comply with the safety standards;
- Sell or use products which do not comply with the safety standards;
- Sell or use banned or recalled products.