[a] key element in product safety policy is the message that’s conveyed to the business community. Without a GSP, suppliers of most products are far less aware of safety and have far less incentive to give safety priority over business costs and other practical factors… Having a GSP in the ACL could engender a much higher awareness of product safety across all suppliers and provide clear motivations to only design, source and supply safe products. In contrast, stakeholders who did not support a general safety provision argued that it would add to compliance costs without providing any clear benefit. For example, the Law Council of Australia’s Competition and Consumer Committee submitted that a general safety provision would ‘simply result in unnecessary duplication and an increased compliance burden for businesses, without any increase in protection for consumers.’ Communications Alliance submitted that a ‘blanket ban on the supply of unsafe goods’: would create uncertainty and compliance difficulties for suppliers… uncertainty and greater compliance costs could provide a strong disincentive to develop and supply new and innovative goods and services ... This would have a particularly negative impact on certain industries (such as telecommunications) where technology is rapidly advancing and offering consumers an increasing range of options. It also submitted that a general prohibition ‘would create uncertainty and compliance difficulties for suppliers’ as to whether their goods are safe where no standard for safety exists. For consultation Option 1 — Introduce a general prohibition against the supply of unsafe goods (‘general safety provision’) As discussed above, CAANZ notes the stakeholders identified a wide range of benefits and costs associated with introducing a general safety provision. To assess whether the case has been made for a general safety provision, CAANZ has identified the following principles for doing evaluating the effectiveness of a product safety regime: The law should be clear. The law should efficiently allocate risk to the party best able to manage those risks. A product safety regime should have levers and incentives that encourage businesses to comply. The law should have adequate penalties to deter future breaches by a business, and by businesses more generally. The benefits of a product safety regime should outweigh the costs. Table 3 below suggests key principles, and possible issues to consider, for an effective product safety regime. In particular, CAANZ seeks views on: whether these principles are appropriate and relevant for a product safety regime
[a] key element in product safety policy is the message that’s conveyed to the business community. Without a GSP, suppliers of most products are far less aware of safety and have far less incentive to give safety priority over business costs and other practical factors… Having a GSP in the ACL could engender a much higher awareness of product safety across all suppliers and provide clear motivations to only design, source and supply safe products. In contrast, stakeholders who did not support a general safety provision argued that it would add to compliance costs without providing any clear benefit. For example, the Law Council of Australia’s Competition and Consumer Committee submitted that a general safety provision would ‘simply result in unnecessary duplication and an increased compliance burden for businesses, without any increase in protection for consumers.’ Communications Alliance submitted that a ‘blanket ban on the supply of unsafe goods’: would create uncertainty and compliance difficulties for suppliers… uncertainty and greater compliance costs could provide a strong disincentive to develop and supply new and innovative goods and services ... This would have a particularly negative impact on certain industries (such as telecommunications) where technology is rapidly advancing and offering consumers an increasing range of options. It also submitted that a general prohibition ‘would create uncertainty and compliance difficulties for suppliers’ as to whether their goods are safe where no standard for safety exists. For consultation Option 1 — Introduce a general prohibition against the supply of unsafe goods (‘general safety provision’) As discussed above, CAANZ notes the stakeholders identified a wide range of benefits and costs associated with introducing a general safety provision. To assess whether the case has been made for a general safety provision, CAANZ has identified the following principles for doing evaluating the effectiveness of a product safety regime: The law should be clear. The law should efficiently allocate risk to the party best able to manage those risks. A product safety regime should have levers and incentives that encourage businesses to comply. The law should have adequate penalties to deter future breaches by a business, and by businesses more generally. The benefits of a product safety regime should outweigh the costs. Table 3 below suggests key principles, and possible issues to consider, for an effective product safety regime. In particular, CAANZ seeks views on: whether these principles are appropriate and relevant for a product safety regime
ACL_Review_Interim_Report_v2.docx