This is Part 5 in a 6 part series. If you haven’t yet read the other parts, you can do so here: Part 1, Part 2, Part 3 and Part 4.
This aspect is dealt with in Chapter 2 Part ‘G’ of the CPA. I will focus on what I believe to be the three key sections (i.e. 48, 49 & 51) for the purposes of greenwashing.
At the outset I must remind you to bear in mind section 22: ‘Plain language‘ and the repeated use therein of the words ‘visual representation‘ – which includes not only the visibility per se but also the often used ‘microscopic‘ font which by definition defeats the objects of the CPA which is an offence (Section 51 (1) (a) (i)). (See the comments re the Renault advertisement at end hereof.)
Section 48 requires price and terms (‘T&C‘) to be fair, reasonable and just (‘F, R & J‘). You may require a consumer to waive/assume obligations, rights and liability provided it is F,R & J. It is, in my view, as some commentators have suggested not a ‘blanket’ rejection of such terms including indemnities. This section also creates what is known in legal parlance as ‘rebuttable presumptions‘ or ‘deeming provisions‘, i.e. the following types of T&C will be deemed not to be F, J & R, if they are (Read with previous article on ‘dealing’):
‘so adverse to the consumer as to be inequitable‘
‘false, misleading or deceptive‘
Regulation 45 (3) EXTENDS the list of presumptions (of which it lists 26!) and here are but a few:
Excluding liability for act/omission resulting in death/injury
Price increase without notice
A number of actions which give the supplier unilateral rights such as changing the T&C or terminating the agreement
Section 49 is a crucial if not, in my view, the most important clause in the CPA pertaining to notifications. It deals with notices that address the limitation or assumption or indemnities pertaining to of risk and liability and the acknowledgement by the consumer of any fact. It furthermore addresses risks that are unusual, which the consumer may not have expected and/or which may result in serious injury or death. You may think this does not apply to greenwashing and that it is more appropriate for activities such as adventure sport. You are in for a shock: just think of food and allergies! The latter is ‘under-played‘ and more often than not ignored as was recently the case when the mere odour of peanuts in an airplane led to an allergic reaction!
The next key aspects of this section are the reason (why), the timing (when) and manner (how) in which the supplier must share any of the above with the consumer and why. I suggest you read the following carefully, make copious notes and share with/train your employees:
The reason this clause requires notification to the customer is stated right at the end i.e. to give the customer an ‘adequate opportunity to receive and comprehend’ the impact of the notice, hence the importance of (where applicable) a customer briefing
Timing is specifically addressed i.e. the notification must be the EARLIEST of the following: when customer (1) enters into the transaction; (2) engages in the activity; (3) enters/gains access to the facility; (4) makes payment. Thus there should be no rushed, last minute circulation of an indemnity on a clipboard circulated as a game drive is about to take place, with small print at the bottom of the form!
The manner in which it must be done is also crucial and this includes ‘plain language’ (as defined in section 22) and ‘conspicuous’ and ‘likely to attract the attention of an ordinarily alert consumer’ – beware hidden signage, small print etc. AND it is preferable to obtain the customer’s signature rather than a simple nod of the head as inter alia a misperception may later be raised (which the supplier is bound to resolve – to be read with section 41).
Finally section 51 – It contains a whole host of prohibited transactions and terms and conditions (‘T&C‘) so to list them here will be tedious BUT I strongly suggest you read it in your own time. Essentially there are three provisions I believe carry a ‘generic message‘ that you must be aware of and apply without fail and apply to all your transactions and T&Cs. i.e. it must not fall foul of the following :
Defeat the purposes of the CPA or mislead the consumer
Erode consumer rights or supplier obligations
Limit supplier liability to gross negligence OR exclude supplier liability to gross negligence
Let’s take a quick look at the last item above. What exactly is gross negligence? The courts have on a few occasions described it as follows:
‘gross negligence … connotes recklessness, an entire failure to give consideration to the consequences of his actions, a total disregard of duty’
I’ve advised close on 300 businesses on the CPA and it never ceases to amaze me when I find clauses that fail the section 51 test, especially the spirit of the CPA (‘Defeat the purposes‘) or the gross negligence issue. Essentially their attitude is ‘We’ll take our chances’ which on the one hand is atypical of the lack of morality, ethics and enforcement of our excellent legislation (CPA, NCA, etc), but on the other they don’t realise the CPA implications of non-compliance with section 51 – see the extract from section 51 (3) below and specifically the underlined part:
A purported transaction or agreement, provision, term or condition of a transaction or agreement, or notice to which a transaction or agreement is purported to be subject, is void to the extent that it contravenes this section.
This simply means that e.g. the ‘clever‘ seemingly ring-fencing you liability clauses/indemnity will NOT protect you!
Readers must bear in mind that T&C (underpinning the contract between the supplier and the consumer) must also comply with the Regulations to the Foodstuffs, Cosmetics and Disinfectant Act, 54 of 1972 (FCD Act) and the following applies to packaging a product (www.mondaq.com):
Should you wish to emphasize any ingredient on the packaging of a product, that ingredient must be listed in the ingredients list.
The name of the foodstuff must be a minimum of 4mm in height.
Any pictorial representations may not be misleading.
Only one official language is required on the packaging.
Any allergens should be listed in brackets after the ingredients.
Ingredients must be listed in descending order of mass.
A nutrient analysis table is mandatory if any claims are made on the label.
Nutrient analysis must be carried out by a Sanas-approved laboratory if claims are made on the label
Then it is also bearing in mind that if a supplier is a member of the Marketing Code Authority, it has a Code of Marketing Practice which must be read in conjunction with the CPA.
Finally the actual content of an advertisement is regulated through a self-regulatory system with the Advertising Standards Authority of South Africa (“the ASA”). The Code of Advertising Practice (“the Code”) is the guiding document of the ASA.
Let’s look at some industry examples:
Woolworths’ sliced ham sandwich packaging with a “South Africa 100% Pork” stamp. (Woolworths).
Woolworths has to withdraw its sliced sandwich ham label, which is branded “South Africa 100% Pork”.
It says that it refers to the fact that the meat is local. But the country’s ad regulator says shoppers may mistake it for a claim that the product is 100% pork meat, while it only contains 70% pork. (Timothy Rangongo , Business Insider SA Feb 05, 2019, 02:31 PM)
Another SA car ad pulled: Renault taken to task over fine print. (WHEELS 24 2016-08-31 12:30)
Anther automaker has been taken to task this time due to the font size in a local TV ad.The complainant, a ‘Mr Cillie’, believes the text used in a Renault Kadjar TV ad is too small and isn’t visible on the screen long enough to actually read the fine print.ASA reports that the commercial was shown on DSTV, channel 144, at the end of June 2016.
The problem: At the end of the commercial, a voice-over says, “The new Renault Kadjar. Dare to live” and the screen displays the price as “From only R4 999PM” in large, white lettering, whereas the information that follows is tiny in comparison and displayed for approximately three seconds.
The next insert will address fair value, quality & safety of goods.
DISCLAIMER – Each case depends on its own facts & merits. The above does not constitute advice. Independent advice should be obtained in all instances.