‘’CONSUMER, TRADER, AND THE STATE, ON TURMOIL’’
Posted on October 5th, 2021

(Ambassador Sarath Wijesinghe President’s Counsel, former Ambassador to UAE and Israel, President Ambassador’s Forum, Editor Five Volumes (books) of Foreign Policy Perspectives /Former Chairman Consumer Affairs Authority- author of two books on Consumer law and Consumerism in Sri Lanka)

‘Badulla Tam’ Pillar Inscription 942AD on Consumerism in Sri Lanka

Regularizing of trade is an essential part of consumerism and main process of trade business local and international, and functioning of a developed and challenging complex society in the door steps of fully digitalized world. In this process the consumer, trader and the state plays an important and pivot role in the functioning of the society and the system of governance. Consumer at any era  of the population is an important group powerful but unknown to them of the power as ‘John Kennady’ stated at the initial stages of the world consumer organization, that consumer is the most important and powerful group equally neglected by the governance and the system as  a neglected group. ‘Badulla’ Pillar inscription (Tam) 942AD gives directions to village heads to be fair and reasonable with detailed instructions by the King, indicating the developed system on trade, commerce and consumerism whilst John Lock and thinkers during their era gave the western views on consumerism which is the start of the modern consumerism and the trends in relation to modern law and practice in areas on commercial law and practices worldwide.

Consumer Affairs Authority no 7 of 2003 established replacing previous English Law instruments in force in Sri Lanka

Currently the Consumer Affairs Authority, and the Ministry of Trade and Consumer Affairs is in turmoil with allegations of misconduct and corruption in CAA and ‘Sathosa’ – equally important institution to the day to day life monitoring  increase of cost of living and difficulties to the society due to ‘Covid’ Pandemic. CAA is the main regulator in the country of prices of consumer items including services, when ‘Sathosa’ being the main state provider of consumer items including essential food items playing a pivotal role. The allegation sprung from one of the three fulltime working directors of the CAA appointed by the Minister under the section 3  of the  Consumer Affairs authority act no 7 of 2003 in force unchanged since the introduction which needs drastic changes. It   repealed, consumer protection act of 1979, fair trading commission act 1 of 87, and control of prices act 173, with revolutionary changes to convert the English model of price control inherited from British to a new system based on regularization process – a mixture of British Australian, Americium modelled act no 7 of 2003, with a new vision based on a smart ideology by visionary Hon ‘Lalith Athuludamuli’- then Trade Minister. By the new act the concept of traditional price control is done away with the introduction of regulation process of price and services. The new controversy has arisen due to fixing the maximum price of paddy and rice which is a complicated process.  Issues among the trader, manufacturer, consumer and the regulator- the State- has emerged due to price fluctuation and different demands by the farmer for higher prices for paddy, rice millers and trader for high prices and consumer for a reasonably low price for rice. Now there are war of words among stalk holders, and issues appear to be at a standstill with no winners and consumers as losers. Charmin and the three full time members of the CAA are appointed by the Line Minister whose duties are specified by the Chairman and the ‘Board’ that  will take collective decisions the Chairman as the leader, navigator and the link with the governance. The dispute by the working director will not be discussed here as there are inquiries on the episode at different levels with unusual and unprecedented media circus. Possibly backed by unseen powerful power block or blocks. It is a sorry state that this episode took place due to misunderstandings and lack of clarity of law and procedure. It is noted that the CAA Chairman and the Board must have effective control of the employees, including the person involved in media limelight that it is the head of the institution that should be on the limelight and control over disciplinary or otherwise with backed by the ‘Board’ and not a fulltime director among three. It is time to make necessary changes with long awaited amendments to the act not taken place since 2003 which needs urgent and important amendments including strict implementation competition law and procedure specified in the act with sufficient force.  Implementation of the process on competition which is enumerated in section 34 on promotion of competition, associated practice and competition procedure in the Consumer Affairs Council which is in the preamble of the act in detail. The working director appear to have a case and a grievance that should have taken up with the CAA board and political authority appointed him to the post.

Maximum Price under S/18 of CAA and concept of price control on English Law

As stated  in the act with research based recommendation by the CAA the Minister can declare certain items essential to the community  in terms of S/18 and the maximum price could be determined and implemented according to procedure in the act, benefiting the trader, manufacturer and the consumer, which is a sensitive and a difficult balancing process. The act provides to implement the process by gazette notifications, and in the absence of amicable agreement currently the price of rice is on the open market allowing the price to be automatically priced and fluctuates based on competition and competition law guidelines and practice which is intended by the act and the concept which apparently have not been understood by successive regulators and governance in power. This is a matter that should not prolong any longer as the nation consumer and economy bleeds and suffers due to the uncertain situation easy to resolve amicably.

 What then is the possible solution? When economy, national Wealth and the Parties to the controversy are on turmoil seeking immediate and a just resolutions.

Ministers and the CAA jointly have enormous powers for a short and a long term solution. First the issue of allegations of corruption has to be dealt with strictly by  legal arms leaving the Minister, CAA and ‘Sathosa’ to handle the matters in a different joint compartment with the advice of the experts in the field. Both CAA and ‘Sathosa’ comes under experienced and matured Trade Minister, who is able and competent to handle this issue to the best with direct intervention of a powerful Major General heading the CAA armed with political and Army powers. The working director in controversy is overstretching his powers with excessive and unethical blowing of media for their benefits of media exploitation. Allegations of corruptions and malpractices and hanging on the head for a long time on current and previous administrators, and this is the best opportunity to take all forward, and give a new life and a vision to the institutions. Next and the most important task is the introduction of the amendments to CAA as a matter of urgency with new changes considering and changes in the current fast changing digitalized world with able legal minds. We presume the current proposed changes are grossly inadequate to meet the needs and a fast trace solution should be adopted as a matter of urgency without allowing escalating until eruption which is inevitable. All the parties concerned are with resolvable burning issues not properly understood and appreciated by respective parties. Parties concerned must realise they are playing with the economy and the future of the country currently in utter turmoil. Amount of the national wealth wasted is enormous of mismanagement on trade, and consumerism. Do we continue with the mode of regulation of prices and services as envisaged by the CAA act or consider carefully reintroducing the practice of price control and the processes of competition adopted in the UK and rest of the world? Are policy decisions to be considered at the amendment process of the act afresh or as amendments? These are some crucial issue to be resolved.

Best solution and Way Forward

Historically and importantly, CWE is a most respected and celebrated ‘Family Silver’ once a provider of consumer goods is ruined by previous administers, who foolishly kept it open for 24 hours or sale of goods countrywide in addition to disposing of properties at lowest prices, with the most expensive lands and buildings in the heart of the capitals country wide was sold discreetly known to few.  CWE was converted to ‘Sathosa’ by the subsequent regime for reasons unknown to many that subsequently came under the Ministry of trade. ‘Sathosa’ was given a lifeline by a current  Member of Parliament who did a wonderful job as then Chairman opening branches countrywide making enamours profits, supervised by a competent and celebrated Secretary of the Ministry then. Currently ‘vultures’ are aiming at the remaining valuable lands in the heart of towns countrywide expecting the natural disastrous death of this most celebrated family silver once a pride of the nation known worldwide. ‘Sathosa’ and CAA should be treated as twin brothers as a major component of the economy, consumerism, cost of living, development, sharing the economic strength and equilibrium of the citizen. It is time for a complete overhaul of the legal and administrative setup of CAA and ‘Sathosa’, and it is a good idea to reshape and reconstruct the institutions with qualified experience and honest leaders in the administrative service still available. Consumer is defined under the section 75 of the act as any actual or potential buyer of any goods or services made available for the consideration by trader or manufacturer which may be slightly differ from other definitions. Next in line to be considered may be to assign the AG’s Department and the Legal Draftsman for changes to the CAA act with proper guidance and directions in the absence of any political figures. There should be a cooing period with a proper and honest Competent Authority with competent professional staff, until AG’s Department and Legal Draftsman completes the assignment. This propositions are presented with academic, professional and practical experience worldwide and hope the governance will consider the proposals with the correct spirit with highest consideration to prevent the turmoil being spread and exploded which is a grave need to avoid. The author can be reached on sarath7@hotmail.co.uk.Fb what’s app active worldwide on 0094777880166.

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