'Country of origin' label regulations enforced

On May 7 2008, the South African Government issued a noticeto say as from the 15 April the country of origin labelling in terms of theMerchandise Act 17 of 1941 will now be enforced. The Department of Trade andIndustry (DTI) and the South African Revenue Services (SARS) will"randomly detain consignments to conduct inspections." According tothe notice, "goods that do not comply with the country of origin labelingwill be sized" and companies or individuals responsible for contriving thelaw can be fined R5000.00 an article or face imprisonment of three years, orboth.[1]

The promulgation of the notice on country of originlabelling came into effect a year ago. This window period was used foreducating the textiles, garments and footwear industries allowing them time tolearn, adapt and comply with the regulations. All merchandise imported as wellas local made merchandise that fall under the Act have to have a labelindicating the country of origin, if imported textiles were used, the fibrecontent and care instructions. An extension of the Act prohibits retailers fromclaiming that merchandise is "Made in South Africa" if themerchandise is "reconditioned, rebuilt or remade within South Africa. If merchandise has undergone any restructuring label information to thiseffect must be applied to the merchandise. In short, my interpretation of theAct reflects that only merchandise that has been wholly assembled(manufactured) in South Africa can have the "Made in South Africa" label. The Act stipulates that all such information on the labellingmust be in clear eligible English.

The Minster of Trade and Industry, Mr. Mandisi Mpahlwa,signed the Act when an investigation by the DTI indicated that some retailerswere passing off locally made clothing as imports or providing misleadinglabels that reflected that the products were made in South Africa.

The Department of Trade and Industry has supplied contactdetails for consumers to report any contraventions.[2]Such initiatives by the DTI are commendable but I have tried by email andtelephone to get hold of the contact person and three days later, I am stillwaiting for a reply. It is no use enacting such opportunities for consumeractivism if the DTI is not capacitated to handle enquiries or responses fromSouth African consumers.

I emailed numerous other people in the DTI and telephonedthem as I have questions relating to the Act. I waited for over five minutesfor someone to answer the call and then was told to phone a number, which justrang. I was copied into an email message from one DTI official who simplyforwarded my list of questions to another DTI employee and I am still waitingfor a response. This inefficiency is inexcusable. Some of the questions I haveare obvious but clarification is vital so that the any ambiguity ormisunderstanding of the Act can be displaced. The following is the list ofquestions I sent to the DTI.

1)    Individuals whosell imported or homemade clothing at craft markets do they also have complywith the regulations? I ask this because I am always looking at the labels ofapparel sellers at these markets and note that most of the clothing have only abrand name or no label at all.

2)    There are manyprivately owned boutiques that retail only imported apparel and I know from myown investigations that many of the merchandise sold at these boutiques do notcomply fully with the regulations even after a year's grace. Are they subjectedto the regulations of the Act?

3)    Do South Africandesigners need to comply with the regulations and can they only place the"Made in South Africa" label if the entire garment was constructed in South Africa? Does the reconditioning, rebuilding or remaking of apparelmitigate them from having a "Made in South Africa" label?

4)    Factory shopsthat sell over-runs or rejects do they have to comply fully with the Act? Irecently looked at one of these outlets in Durban and noted that some of theapparel has labels while others do not.

5)    What informationmust be supplied if consumers wish to inform the DTI about infringements of theAct?

A further question I posed to the DTI was in relation to their checking imports. It is all very well to check merchandise entering South Africa via its different points of entry but I wanted to know if DTI and SARS would be doing random checks at shopping malls, on the streets etc for non-compliance of the Act. I think there is a great employment opportunity to create a fashion police taskforce to do in-situ checks at various retail outlets. Initial thoughts relating to this idea is to train in each Province individuals in the details about the act, what to look for as well as a historical analysis of the local industry. This fashion taskforce can be equipped with identification that can be verified. Such a taskforce would need to be equipped with systems to document any infringements. Such an operation to work effectively would need to be backed by a competent contingent of project leaders with an effective and efficient partnership between DTI, SARS, the South African Police Services (SAPS), the Justice Department, as well as with labour and Apparel Industry Bodies.

I expect to be criticized for wanting to implement further barriers by suggesting that checks are made at various retail outlets for South African fashion designers who are already finding it difficult to create and sustain market share while competing with cheaper imports.

It is imperative that the South African fashion sector mobilizes to lobby government to ensure that the regulations are enforced. Enforcement of the Act will "put a lid on corruption and fraud such as transhipment and country of origin swapping" [3]or "to deal with illegal imports."[4]Such illegal activity is cutting away at the local market for South African designers. Furthermore, the enforcement of the Act will provide consumers with the satisfaction that when they buy a garment that has a "Made in South Africa" label they will know for certain (I hope) that the entire product (barring maybe the usage of imported textiles) has been made in South Africa.

The one person from DTI who did respond to a question I posed directly to her was Ms. Bulelwa Hewu, the Assistant Director at the Office of Consumer Protection who said that it would be difficult for consumers to verify if the goods "are really made in South Africa." If this is the case, then what must consumers do if they are in doubt about the authenticity of "Made in South Africa" apparel? Do consumers have the right to ask retailers to verify the products or must they contact the DTI if they are in doubt?

The purpose of the Act if mechanisms are put in place to verify "Made in South Africa" labels is intended to empower the consumers knowing that by purchasing such products with the "Made in South Africa" label they will be supporting the entire local apparel value-chain. For the fashion sector the Act can be a catalyst for bring the manufacturing sector and designers together creating business opportunities to produce more "Made in South Africa" designer clothing.

I am also waiting for a reply from Proudly South Africa. I asked them if they would initiate any consumer, educational drive around the Act as this is an ideal opportunity to not only mobilise our consumers to supporting "Made in South Africa" products but to educate the affected industries about the Act and their obligations, although after one year everyone in these industry sectors should by now be applying the label regulations to their products.

Not only is such an educational campaign important for consumer knowledge and rights it is equally important for importers who have to meet tight delivery times to educate their customers that orders may and can be delayed if consignments are stopped and checked and any penalties for late delivery will need to be wavered.

Written by Renato Palmi The ReDress Consultancy-South Africa

@ May 2008-05-13

Web: http://www.redressconsultancy.blogspot.com/

INFORMATION CIRCULAR ON COUNTRY OF ORIGIN NOTICE NO. 1831 OF 2006 (Government Gazette No. 29480) in terms of the MERCHANDISE MARKS ACT 17 OF 1941.

In terms of the notice, Minister Mpahlwa prohibits the importation or the sale in South Africa of merchandise or goods as specified in the schedule, irrespective of whether such merchandise or goods were made or produced in the Republic or elsewhere, unless the following information is attached permanently and prominently: -

The country they were produced or made in.

Where a South African textile manufacturer has used imported griege fabric to produce dyed, printed or finished fabric, it should be indicated that such fabric has been dyed, printed or finished in South Africa from imported fabric.

That a locally manufactured product using imported material must state "made in South Africa from imported material. "

The goods must conform to the South African national standards for fibre content and care labeling as prescribed in Notice No. 2410 of 2000, published in Government Gazette of 30 June 2000.

If the goods are reconditioned, rebuilt or remade, within the Republic of South Africa or outside the country, this information should be applied to the goods in eligible wording.

The label should state clearly "made in South Africa" if the product is wholly assembled in the RSA, otherwise the product do not qualify for such a label.

When buying items that have been listed in the schedule i.e. textiles, articles of textile, clothing, shoes and leather goods merchandise, whether from the manufacturer or retailer, consumers should ensure that such goods bear a label indicating their country of origin, fibre content as well as care labelling.

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