How product recalls protect SA consumers

Product recalls are in the spotlight again with some brands of peanut butter recalled in the past week due to levels of aflatoxins that exceed regulatory limits.

Product recalls inevitably involve serious issues, including consumer welfare and manufacturer reputation and liability, Helen Michael, director at Werksmans Attorneys, writes.

“It is therefore important for manufacturers, consumers and all the stakeholders between them, including suppliers and distributors, to take note of their legal rights and obligations regarding product recalls in South Africa.”

ALSO READ: Peanut butter health risk spreading: More brands recalled due to high toxin levels

Recalls are primarily regulated in South Africa by the Consumer Protection Act (CPA). The CPA applies generally to goods supplied to consumers and broadly defines goods as anything marketed for human consumption or any other tangible product. Recalls of specific products are also regulated more directly in sector-specific legislation.

Two categories of product recalls

The CPA provides for two categories of recalls: voluntary and mandatory. Suppliers undertake voluntary recalls when they proactively identify a risk of potential harm posed to consumers from its products and want to manage that risk and its potential liability to consumers.

Mandatory recalls are required by the National Consumer Commission (NCC) when there are reasonable grounds to believe that any particular goods may be unsafe, or that there is a potential risk to the public from the continued use of or exposure to the goods as described in section 60(2) of the CPA.

Michael says in practice most recalls are initiated voluntarily, given that the supplier has intimate knowledge of its product and the consumer market that uses those products. Voluntary recalls are based on the proactive management of a supplier’s potential risk and liability.

Section 61 of the CPA provides for strict liability for producers, importers, distributors and retailers of goods where goods cause harm when they are “unsafe”, suffer from a “product failure, defect or hazard” or where goods were not accompanied by appropriate instructions or warnings.

ALSO READ: Pick n Pay recalls peanut butter due to high levels of aflatoxin

Definitions in the CPA regarding fair value, good quality and safety

The CPA also gives these definitions in section 53 that apply to fair value, good quality and safety:

• “defect” is defined as any material imperfection in the manufacture of the goods or components, or in performance of the services, that renders the goods or results of the service less acceptable than consumers would be reasonably entitled to expect in the circumstances, or any characteristic that renders the goods or components less useful, practicable or safe than people generally would be reasonably entitled to expect in the circumstances;
• “failure” is defined as the inability of the goods to perform in the intended manner or to the intended effect;
• “hazard” is defined as “a characteristic that has been intended as, or declared to be, a hazard in terms of any other law or presents a significant risk of personal injury to anyone, or damage to property, when the goods are used;
• “unsafe” means that, due to a characteristic, failure, defect or hazard, particular goods present an extreme risk of personal injury or property damage to the consumer or other people.

Suppliers can be held liable for specific types or categories of harm according to section 61(5) that include the death of or injury to any natural person, an illness of any natural person, any loss of, or physical damage to, any property, irrespective of whether it is movable or immovable and any economic loss that results from this harm.

Michael says the provisions of section 61 are therefore very broad in nature and intended to afford consumers as much protection as possible regarding the circumstances where harm was caused by the use of certain goods.

ALSO READ: Nestlé recalls some Kit Kat products, could contain glass pieces

Voluntary recall of peanut butter

The peanut butter recall was a voluntary recall. In the case of a voluntary product recall, the NCC guidelines require that suppliers to:

• Conduct a risk analysis of the safety hazard;
• Cease production or modify the manufacturing process for the product identified for recall;
• Notify the relevant regulator/s and relevant parties;
• Determine a course of action;
• Prepare a written recall strategy/plan;
• Draft a communication plan for consumers;
• Arrange for the retrieval of the products;
• Meet reporting obligations.

A risk analysis of the safety hazard: According to the NCC guidelines, once a supplier becomes aware of a possible safety hazard in a product that may cause injury, it is required to gather and assess all available information about the potential hazard, identify how the problem occurred and conduct a comprehensive risk analysis.

Ceasing production or modifying the manufacturing process: A supplier must then stop the production of a product that is subject to recall or alternatively modify the manufacturing process to remove the hazard.

Notifying the relevant regulator/s and relevant parties: The supplier must notify the NCC of the recall, in writing and in the prescribed form, preferably before starting the recall action or alternatively within two days.

Determining a course of action: The guidelines specify that a supplier must decide on the most appropriate course of action to reduce the risk of harm to consumers, considering the nature of the risk, as well as the distribution and lifecycle of a defective product. The supplier is also obliged to consult with the NCC about the most appropriate strategy for the recall.

Preparing a written recall strategy/plan: A supplier must submit a recall strategy to assure the NCC that any product safety risk will be effectively mitigated. The recall strategy must contain specific information, including an explanation of the problem, the number of products affected, the hazards associated with the product and the supplier’s assessment of the risk posed by the product.

Communicating with consumers: In addition to the requirement of submitting a recall strategy, the guidelines require a supplier to compile a communication plan and recall notice for consumers which must be “directed towards the particular consumer demographic for the recalled product, using an appropriate communication method”. The recall notice must include a clear description of the product and the defect, including a photograph of the product, as well as a section entitled “What To Do”, which explains the immediate action for the consumer to take, such as to stop using it immediately and return it to the shop where they bought it for a full refund.

Arrangements for retrieval: The guidelines prescribe that suppliers must make arrangements for the actual retrieval of the recalled product.

Reporting obligations: The guidelines provide that in order to monitor the progress and enable ongoing assessment of the effectiveness of the recall, the NCC requires a supplier to provide progress reports. The NCC will also develop a reporting schedule with a supplier at the beginning of a recall that appropriately reflects the product risk being addressed.

Michael says ultimately, the guidelines emphasise the responsibility that suppliers bear to be proactive in monitoring and ensuring the continued safety of products sold to consumers as well as the need for suppliers to take sufficient and expeditious voluntary steps to mitigate any safety concerns apprehended regarding defective products.