Product recall- a supplier’s worst-case scenario. How can you plan to decrease the risk?

The National Consumer Commissioner issued guidelines in respect of product recall in June 2012. They can be found at http://www.polity.org.za/article/consumer-protection-act-682008-national-consumer-commission-consumer-product-safety-recall-guidelines-gazette-no-35434-notice-490-2012-06-13. These guidelines are particularly onerous for suppliers.

A recall will always be required where consumers’ safety is at risk- even if the risk is remote.

We need to distinguish between a supplier’s voluntary recall, where a recall is undertaken at the supplier’s own initiative. A worse option for a supplier, is where the National Consumer Commission orders a recall in terms of section 60 of the CPA. They are supposed to order a recall if they have reasonable grounds to believe:
• any goods are unsafe (i.e. they present an extreme risk of personal injury or property damage), or
• there’s a potential risk to the public from the continued use of, or exposure to the goods, and
• the producer or importer of those goods hasn’t acted in line with the guidelines.

Even if a recall is undertaken voluntarily, the supplier will have to inform the authorities and comply with the guidelines.

However, the guidelines were not promulgated in line with the requirements of sections 60 and 82 of the CPA, which requires the guidelines to have been issued by the Minister of Trade and Industry, not the Commissioner. As a result, in principle, they are not enforceable because they are ultra vires.

However, our courts have stated that an unlawful administrative act (such as the promulgation of the guidelines) and all of its consequences remain valid until set aside by a court (Oudekraal Estates Pty Ltd v City of Cape Town 2004 (6) SA 222 (SCA). So, until an intrepid supplier has these guidelines set aside by a court, which should be a very straightforward procedure, suppliers need to keep on complying with them.

Practical suggestions for manufacturer and importers to limit the pain of a product recall:
• boost your quality assurance systems so that you pick up a problem before anyone else
• Insert a clause in your supply contracts with all of the players in the supply chain to require them:
o to keep records of the distribution of products per batch number,
and
o in the event of a recall to prioritise cooperating with your instructions at their own expense.