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• Vote: Consumer Affairs

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• Annual Report

• 2008/2009
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In this part of the Annual Report, ‘The Ministry' refers to The Ministry of Consumer Affairs which operates within the Ministry of Economic Development.

Output Expense > Policy Advice and Information on Consumer Issues

Description

This output expense provides policy advice and information on issues, policies and programmes affecting or potentially affecting the ability of consumers to transact with confidence.

Work programme

Quantity, quality, timeliness and cost

Policy advice projects were delivered in accordance with the terms of the work programme as agreed with the Minister. Changes to deadlines were negotiated with the Minister.

Progress on priorities agreed with new Ministers⁸

At the beginning of 2009, the Ministry agreed a number of new priorities with its Ministers and priorities resulting from the Job Summit. The following reports on progress with these priorities.

Implementation of Part 3 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008, concerning the development of the reserve dispute resolution scheme and the process for considering applications to become approved dispute resolution schemes.

The Ministry released two discussion papers in June 2009:

• Draft Guidelines to Assist Schemes Applying to Become an Approved Dispute Resolution Scheme under the Financial Service Providers (Registration and Dispute Resolution) Act 2008
• Proposed Reserve Dispute Resolution Scheme under the Financial Service Providers (Registration and Dispute Resolution) Act 2008.

A review of consumer legislation with the aim of achieving principle-based legislation covering all trading transactions and a consolidation and simplification of existing legislation.

Work commenced on this review which builds on previous work reviewing the Fair Trading Act 1986 and the Consumer Guarantee Act 1993. The review also covers the Door to Door Sales Act 1967, the Layby Sales Act 1971, the Auctioneers Act 1928, the Unsolicited Goods and Services Act 1975, the Carriage of Goods Act 1979, and the Sale of Good Act 1908.

Achieving "One Door" for the provision of consumer information, particularly related to seeking redress.

Terms of Reference for the review were agreed with the Minister. An initial options paper has been prepared for Minister's consideration.

Completion of the review of the operation of the Credit Contracts and Consumer Finance Act

Substantial progress was made on this review. A discussion paper will be published in September 2009.

Motor Vehicle Sales Act Amendment Bill 2009

The Bill was introduced and had its First Reading.

Progress on work programme set out in 2008 SOI

The following reports on progress with the key pieces of work set out in the Ministry's 2008 Statement of Intent. It also assesses how this work has contributed to the outcomes and objectives identified in the 2008 Statement of Intent.

Dynamic and Trusted Markets

The Ministry of Consumer Affairs has:

• Begun initial work reviewing consumer legislation to ensure that it is up to date and relevant. As noted above the work was identified by the Minister of Consumer Affairs as a key priority.

Continued to place emphasis on working with ‘front line' community agencies including Citizens Advice Bureaux, Budget Advisory Services and Community Law Centres who help provide these agencies with training, user-manuals, and a hotline for back up support.

• Provided public information programmes on the Motor Vehicles Sales Act and the Credit Contracts and Consumer Finance Act, Fraud Awareness, and Powerswitch (a comparative website for domestic consumers of electricity).
• Completed a survey of the safety of a number of consumer products to improve management of risks related to product safety. The results of this survey will be available later in 2009 and will be used to undertake a risk assessment for ongoing product safety compliance monitoring.

Other Activity set out in the 2008 "Information Supporting the Estimates"

The following reports on progress with other work, as set out in the 2008 "Information Supporting the Estimates" including (where relevant) assessing our performance against other significant activities of interest.

Consumer Policy – Advise the government on legislation and issues affecting consumers, and on international consumer issues relevant to New Zealand

The passage through Parliament of the Commerce Commission (International Cooperation and Fees) Bill

The Bill was tabled in the House in September 2008.

New consumer information standards water efficiency labelling regulations

Work has progressed on the drafting of the water efficiency labelling regulations.

The passage through Parliament of the Financial Service Providers (Registration and Dispute Resolution) Bill.

This Bill was passed in September 2008. Since this time the Ministry has been working on the establishment of the Reserve (Dispute Resolution) Scheme and guidelines for those seeking to become Approved Dispute Resolution Schemes. As noted above, discussion papers were released on these matters in June 2009.

Gas Industry Company (GIC) and Electricity Commission (EC) proposals affecting consumers.

The Ministry has been involved in the work to determine an approved electricity and gas industry consumer dispute resolution scheme. This work has included working with both the GIC and EC and also liaising with industry. This work did not have any agreed timeframes; however, the need to have speedy resolution of issues has been recognised in the Ministry's contribution to this work.

Consumer representative appointments.

Cabinet papers were prepared for the Minister for consumer representative appointments to the Telecommunications Dispute Resolution Service, the Insurance and Savings Ombudsman Scheme and the Banking Ombudsman Scheme. Advice on the appointments was provided within the timeframe of at least two months prior to the expiry of a current appointment.

Additionally, the Ministry supplied names in response to 34 requests for nominees for other boards and committees. Of the Ministry's nominations, 8 were subsequently appointed to positions as consumer representatives.

Advice on the Ministerial Council of Consumer Affairs (MCCA).

Advice was provided on a number of out-of-session papers. A full briefing of issues was provided to the Minister to support her attendance at the May 2009 MCCA meeting. Advice was also provided on a New Zealand relationship clause that was included in the Australian National Consumer Law Intergovernmental agreement.

Consumer Information and Capability – Support the effectiveness of consumer policy and legislation through the provision of information to consumers, community agencies and businesses regarding their legal rights and obligations and access to remedies and redress.

Support ‘front line' community agencies including Citizens Advice Bureaux, Budget Advisory Services and Community Law Centres who help consumers seeking information and assistance

The Ministry provides these agencies with training user manuals and a hotline for back-up support. 17 training seminars for Citizens Advice Bureaux were provided in 2008–09 and a national consumer training day provided for a wide range of other organisations such as community law centres, Mäori Women's Welfare League and budget services. For the year, 918 complex consumer enquiries were escalated, primarily from community agencies, to the Ministry for more assistance.

Provide public information programmes on the Motor Vehicle Sales Act 2003, Credit Contracts and Consumer Finance Act 2003 (CCCFA), mass marketed scams and Powerswitch.

Completed three public information programmes on:

1. Motor Vehicles Sales Act and the Credit Contracts and Consumer Finance Act.
2. Fraud Awareness.
3. Powerswitch (a comparative website for domestic consumers of electricity).

Provide print and web-based information for consumers and business on Consumer Law.

Completed re-publication of Ministry's range of print information for consumers.

Completed a survey of the safety of a number of consumer products to improve management of risks related to product safety. The results of this survey will be available later in 2009 and will be used to undertake a risk assessment for ongoing product safety compliance monitoring.

Completed stage one of the redevelopment of the Consumer Affairs' website to better meet the needs of users for accessible information.

Motor Vehicle Sales Act (MVSA) 2003 – The promotion, education on, and evaluation of the effectiveness of the MVSA.

A Public information campaign on the MVSA was undertaken between June and August 2009.

Major variances

The Supplementary Estimates increase reflected the transfer of work and associated funding from 2007/08 to 2008/09 relating to the EPIserver migration, Powerswitch Online Facility and amendments to the Fair Trading Act.

The variance between Supplementary Estimates and actual expenses was due to the deferral of work on the development of the MCA Website and the completion of the National Consumer Survey commenced in the last quarter of 2008/09. This resulted in an under-spend of ($124,000).

Output Expense > Measurement and Product Safety Compliance and Enforcement

Description

This output expense is limited to compliance and enforcement activities to ensure a supportive measurement and product safety infrastructure for business and consumers.

Work programme

Quantity, quality, timeliness and cost

Policy advice projects were delivered in accordance with the terms of the work programme as agreed with the Minister. Changes to deadlines were negotiated with the Minister. Performance standards and forecast volumes are in brackets where applicable. Performance standards and forecast volumes are in brackets where applicable.

Progress on work programme set out in 2008 SOI

The following reports on progress with the key pieces of work set out in the Ministry's 2008 Statement of Intent. It also assesses how this work has contributed to the outcomes and objectives identified in the 2008 Statement of Intent.

Dynamic and Trusted Markets

The Ministry responded to approximately 384 consumer complaints and enquiries. Information and advice provided, where necessary, on improving compliance for businesses and informing consumers.

Other activity set out in the 2008 "Information Supporting the Estimates".

The following reports on progress with other work, as set out in the 2008 "Information Supporting the Estimates," including (where relevant) assessing our performance against other significant activities of interest.

Measurement – The management of New Zealand's trade measurement environment to meet international standards in relation to goods sold by weight, measure or number.

Represent New Zealand and facilitate New Zealand's input into developing international standards for legal metrology.

The Ministry:

• Actively participated, contributed and presented New Zealand's perspectives as part of the International Organisation of Legal Metrology (OIML).
• Attended Technical Committee 6 on Pre-packaged Goods to help facilitate trade in packaged goods and reduce technical barriers to trade.
• Represented New Zealand's interests through participation and attendance at the OIML Conference and International Committee of Legal Metrology (CIML) meeting and at the Asia-Pacific Legal Metrology Forum (APLMF) annual meeting.
• Chaired and effectively led the APLMF Working Group on Goods Packed by Measure.

Quality

Completed 100% (95%) of measurement surveillance, accreditation, type approval and enforcement activities, where applicable, in accordance with the Weights and Measures Act 1987, ISO 17025 laboratory accreditation and with Measurement and Product Safety Service Complaint and Procedure Manuals.

Surveillance, education and enforcement activities to be undertaken with traders to check the correctness of weighing and measuring equipment and pre-packaged goods promoting compliance with the Weights and Measures Act 1987:

• 324 (400) inspections of volume measuring instruments including: fuel dispensers, LPG dispensers and measuring instruments supporting retail, dairy and manufacturing industry transactions.
• 822 (800) inspections of weighing instruments including: retail scales, light industrial instruments and weighbridges in support of trade transactions.
• 428 (400) visits to traders or suppliers to check for compliance with the Weights and Measures Act 1987 including; the use of weighing and measuring equipment, sales of goods by weight or measure, labelling, the activity of Accredited Persons' and administrative requirements.
• 219 (60–80) responses to consumer complaints or enquires concerning measurement.
• 26 (20) Average Quantity System reference tests on packaged goods with a focus on primary producers and wholesalers.
• 220 (200) surveillance inspections of a targeted selection of packages consisting of Average Quantity System sample assessments and catch weight packages with a focus on retail products.

Promotion and enforcement of a supportive measurement infrastructure for businesses and consumers through the administration of the Weights and Measures Act 1987:

• participated in the development of and dissemination of 9 OIML International Recommendations and International Documents through a consultative process with industry.

Administration of the Weights and Measures Act 1987 provisions relating to the Accreditation Scheme:

• Calibrate and verify 208 (100-150) Accredited Persons' working standards (mass, length or volume) and issue Verification Reports.
• Process 5 (2–4) new applicants for accreditation.
• make 28 (10–20) extensions and additions to accreditation.

(Output is demand driven)

Maintenance of a type approval regime that ensures measuring instruments do not facilitate fraud, by complying with ISO 17025 accreditation and OIML recommendations:

• Administered 63 (30–40) applications for type approval of weighing and measuring instruments in accordance with the Weights and Measures Act 1987, OIML recommendations and ISO 17025 accredited procedures. Output is demand driven and consisted of 24 overseas based approvals, 14 in-situ approvals and 25 variants to existing approvals.

Product Safety – Provide product safety services to promote an environment in which consumers are supplied with safe products and have information as to their safe use.

A product safety risk assessment project designed to provide an initial assessment of New Zealand's risk profile with respect to high risk consumer products in light of global trends, in order to provide advice of the robustness of the current regime was commenced in 2009. Results are currently being analysed.

Develop international linkages with regulators in other economies to facilitate the identification, prevention and resolution of product safety issues

The Ministry:

• Opened a dialogue with Chinese Product Safety Regulators in support of the China/New Zealand Free Trade Agreement.
• Completed Initial work on development of a Memorandum of Understanding in relation to the exchange of product safety information with China.
• Represented New Zealand's interests through participation and membership of the International Consumer Products Health and Safety Organisation and International Consumer Product Safety Caucus.

Promotion and enforcement of a supportive product safety infrastructure for businesses and consumers through the administration of the product safety provisions of the Fair Trading Act 1986:

• 375 (300) visits to traders, suppliers or manufacturers to check product safety and respond to emerging issues and high risk products.
• 165 (80–100) responses to consumer complaints.
• 72 (60) responses to product safety enquiries from traders, consumers and other stake holders.

Major budget variances

The Supplementary Estimates increase reflected the transfer of work from 2007/08 to 2008/09 relating to work on Toy Regulations.