09 September 2019
The ACCC wants a ‘general safety provision’ introduced into the Australian Consumer Law (ACL) by the end of 2019. Such a provision would impose an obligation on suppliers to not supply unsafe products to Australian consumers.
A general safety provision imposes a statutory obligation on a supplier not to supply unsafe goods to consumers – as opposed to a supplier merely being exposed to consumer claims for damages and other remedies after an injury has been caused by the goods.
The practical effect of such a provision is that suppliers must (in order to avoid contravention and penalties) take proactive steps to check the safety of a product before they make a decision about whether to supply it to consumers. While it may come as a surprise to many, no such obligation currently exists under the Australian Consumer Law.
General safety provisions are in effect in several overseas jurisdictions including the United Kingdom, the European Union, Canada, Malaysia, Singapore and Brazil. For example, the general safety provision in the United Kingdom states:
‘no producer shall place a product on the market unless the product is a safe product.’
This relatively concise provision is supported by detailed regulations that clarify how compliance with the general safety provision is achieved.
There are various provisions in the ACL that address product safety issues. In particular:
However, a supplier does not contravene the ACL by supplying that product to Australian consumers (unless it is subject to a mandatory standard), even if it knows or suspects that it is potentially unsafe.
The ACCC wants this ‘reactive’ product safety framework to be rebalanced through the introduction of a statutory obligation for suppliers to take proactive steps to determine whether products they propose to supply to Australian consumers are safe (and not supply them if they are found to be unsafe).
It is not yet clear whether the ACCC intends for contravention of the general safety provision it is proposing would attract civil or criminal liability. In the UK, contravention of its general safety provision is a criminal offence which can result in up to 12 months imprisonment.
While there is good logic behind the introduction of a general safety provision, its introduction raises some uncertainties that policymakers and suppliers need to grapple with. For example:
In order to discharge their obligations under the general safety provision, suppliers of goods to Australian consumers are likely to need to direct additional resources toward assessing products that they propose to supply (and creating a documentary record of those assessments).
While a general safety provision may increase compliance requirements, it may also provide some competitive advantage for those businesses that already take proactive steps to test and ensure the safety of their products before supplying them to Australian consumers.
In this regard, chairman of the ACCC, Rod Sims, commented that the provision would “create a level playing field so that those firms who deliberately supply cheap but unsafe products do not derive a financial benefit.”
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