The Constitutional Right of Consumer Protection in Kenya
Category: Consumer protection
By: Leo Kipkogei Kemboi,
The inclusion of Consumer rights into State law is not a new phenomenon but existed for centuries even in the period where barter trade was the primary form of trade. Every society in history, where barter trade existed, has sought to develop a legal framework to define the relationship between the vendor and the buyer with one of the provisions being to protect the buyer who entered into a contract, such as the right to claim defective good[1].
The consumerism movement in the 1950s gave rise to the Consumer Bill of Rights that was pushed for by John F. Kennedy which established four basic rights; the right to safety, the right to be informed, the right to choose, and the right to be heard. Subsequently, two decades later, the United Nations included four more rights to protect consumers: the right to satisfaction of basic needs, the right to redress, the right to consumer education, and the right to a healthy environment[2]. At this moment, consumer rights were widely adopted globally.
There are sufficient economic theory reasons that justify Consumer Protection. The justification in economic theory for Government intervention in the consumer protection area is the market failures driven by supply (sellers) and demand-side (consumers) which creates artificial distortions in the market. The types of market failures include information asymmetry, externalities and uncompetitive markets[3]. While justifying government, it should be noted that competition is the ultimate consumer protection mechanism[4].
Consumer Rights in Constitution of Kenya, 2010.
Article 46 of the Constitution of Kenya introduces consumers rights and requires that Parliament enact legislation that provides for consumer protection and fair, honest and decent advertising. Further, Article 46 makes it unequivocal that consumer rights have to be observed by both Public and Private entities. The guaranteed rights for the consumer guaranteed by the Constitution can be summarized into four major issues.
- Consumers have a right to goods and services of reasonable quality.
- Consumers have a right to the information necessary for them to gain full benefit from goods and services
- Consumers have a right to the protection of their health, safety, and economic interests
- Consumers have a right to compensation for loss or injury arising from defects in goods or services.
After promulgation of the Constitution, Parliament enacted legislation that enabled Article 46. The Competition Act No. 12 of 2010 (Revised in 2016) is the act of Parliament enacted to protect consumers from unfair and misleading market conduct. Additionally, the legislation was enacted to promote and safeguard competition in the national economy, and to provide for the establishment, powers and functions of the Competition Authority and the Competition Tribunal. The Competition Authority has broad powers to enforce consumer protection measures and sanction businesses that violate the provisions of that law.
One of the things that stand out evidently from the Competition Act is consumer protection and competition jurisdiction in broad sectors of the economy has been put together. The jurisdiction of the competition is outlined in sections on mergers and the control of the unwarranted concentration of Economic Power. The function of consumer protection is outlined by the section on restrictive trade practices and consumer welfare. There is emerging precedence that the two functions have been separated globally. An example of such in Sub-Saharan Africa is South Africa where the competition role has been left to the Competition Commission[5] and the role of Consumer Protection is left to the National Consumer Commission (NCC)[6]. While this practice of separating agencies that deal with consumer protection and competition issues is becoming more prevalent, what matters is whether those specific institutions are efficient in performing those roles.
Consumer Protection Trends
Based on the latest available information, the Authority handled 178 consumer complaints. This means that at least one complaint was filed for every 270,000 Kenyans. Out of the 178 complaints, 39 cases were in the manufacturing sector, 37 cases in the finance and insurance, 12 cases for transportation and storage and 2 cases for the accommodation and food services sectors. The 178 cases in the financial year 2019/2020 reflected a 28% increase from the 2018/2019 financial year. The Authority attributes this to continued consumer rights campaign initiatives, including the creation of awareness to the consumers at the County level and increased media campaigns[7].
Some Notable Observations
- The Competition Authority of Kenya should review its complaints mechanism with the view of making the process faster and more simplified.
- The Competition Authority of Kenya should make the resource argument to Parliament for hiring staff dedicated to helping the citizenry in filling consumer complaints given the diversity and complexity of consumer issues.
- While Article 46 spells out the mandate for Consumer Protection, it’s important to note in practical terms that the mandate is shared by different agencies. For example, while the Kenya Bureau of Standards might be responsible for the public safety dimension of consumer protection, the consumer protection mandate for healthcare or Engineering services can only be handled by the Kenya Medical Practitioners and Dentists Council[8] and the Engineers Board of Kenya (EBK)[9] The law enabling Article 46 of the Constitution should be cognizant of the same to allow for flexibility in enhancing consumer protection in Kenya.
- While the Competition Authority of Kenya is supposed to be autonomous, the selection and population of the members of the Authority suggest otherwise. The Authority consists primarily of a chairman, Principal Secretaries of finance and trade (or their representatives), Attorney General, Director General of the Authority, five other members appointed by the Minister. The solution is to have an independent selection committee whose role is to select members of the Authority, and their term ends once they have settled on qualified candidates.
- At the Authority level, the decentralization and autonomy of the divisions of the Authority are based on the major functions of Competition Authority as outlined by the law. This allows broad-based specialization to happen.
- The research role for competition and consumer protection should be separated to allow for growth in the capability to grow knowledge on trends of consumer issues and how they can be enforced.
- The findings of publicly available Economic research should inform enforcement action. This proposal illustrates that research should have shown how pervasive financial scams and frauds, and subsequent measures to address consumer protection issues.
Conclusions
The place of consumer protection is firmly in the constitution. The three main issues coming from this piece that is of going concerns is efficiency in enforcement measures, governance framework of the Competition Authority and how it affects consumer protection, and the ability of the Authority to be able to deal with upcoming issues in the consumer protection landscape. In conclusion, while the mandate of the Competition Authority of Kenya might be strongly founded in the Constitution, the performance is still in a long way to go.
References
[1] Czech Trade Inspection Authority. “History of Consumer Rights Protection – COI.” www.coi.cz, 2003. https://www.coi.cz/en/about-ctia/history-of-consumer-rights-protection/.
[2] “Consumer Rights | Boundless Business.” Lumenlearning.com, 2019. https://courses.lumenlearning.com/boundless-business/chapter/consumer-rights/.
[3] Maciej Bukowski, and Tomasz Kaczor. Contribution to Growth: Consumer Protection. 2019. European Parliament.
[4] Michael R. Baye. The Economics of Consumer Protection, Antitrust, and Policy.
[5] The Competition Commission of South Africa. 2022. https://www.compcom.co.za/
[6] National Consumer Commission (NCC). 2022. https://www.thencc.gov.za/
[7]Competition Authority of Kenya FY 2019/2020 Annual Report. https://www.cak.go.ke/planning/annual-reports
[8] Kenya Medical Practitioners and Dentists Council https://kmpdc.go.ke/
[9] Engineers Board of Kenya (EBK). https://ebk.go.ke/
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The Constitutional Right of Consumer Protection in Kenya
| Post date: Tue, Feb 1, 2022 |
| Category: Consumer protection |
| By: Leo Kipkogei Kemboi, |
The inclusion of Consumer rights into State law is not a new phenomenon but existed for centuries even in the period where barter trade was the primary form of trade. Every society in history, where barter trade existed, has sought to develop a legal framework to define the relationship between the vendor and the buyer with one of the provisions being to protect the buyer who entered into a contract, such as the right to claim defective good[1].
The consumerism movement in the 1950s gave rise to the Consumer Bill of Rights that was pushed for by John F. Kennedy which established four basic rights; the right to safety, the right to be informed, the right to choose, and the right to be heard. Subsequently, two decades later, the United Nations included four more rights to protect consumers: the right to satisfaction of basic needs, the right to redress, the right to consumer education, and the right to a healthy environment[2]. At this moment, consumer rights were widely adopted globally.
There are sufficient economic theory reasons that justify Consumer Protection. The justification in economic theory for Government intervention in the consumer protection area is the market failures driven by supply (sellers) and demand-side (consumers) which creates artificial distortions in the market. The types of market failures include information asymmetry, externalities and uncompetitive markets[3]. While justifying government, it should be noted that competition is the ultimate consumer protection mechanism[4].
Consumer Rights in Constitution of Kenya, 2010.
Article 46 of the Constitution of Kenya introduces consumers rights and requires that Parliament enact legislation that provides for consumer protection and fair, honest and decent advertising. Further, Article 46 makes it unequivocal that consumer rights have to be observed by both Public and Private entities. The guaranteed rights for the consumer guaranteed by the Constitution can be summarized into four major issues.
- Consumers have a right to goods and services of reasonable quality.
- Consumers have a right to the information necessary for them to gain full benefit from goods and services
- Consumers have a right to the protection of their health, safety, and economic interests
- Consumers have a right to compensation for loss or injury arising from defects in goods or services.
After promulgation of the Constitution, Parliament enacted legislation that enabled Article 46. The Competition Act No. 12 of 2010 (Revised in 2016) is the act of Parliament enacted to protect consumers from unfair and misleading market conduct. Additionally, the legislation was enacted to promote and safeguard competition in the national economy, and to provide for the establishment, powers and functions of the Competition Authority and the Competition Tribunal. The Competition Authority has broad powers to enforce consumer protection measures and sanction businesses that violate the provisions of that law.
One of the things that stand out evidently from the Competition Act is consumer protection and competition jurisdiction in broad sectors of the economy has been put together. The jurisdiction of the competition is outlined in sections on mergers and the control of the unwarranted concentration of Economic Power. The function of consumer protection is outlined by the section on restrictive trade practices and consumer welfare. There is emerging precedence that the two functions have been separated globally. An example of such in Sub-Saharan Africa is South Africa where the competition role has been left to the Competition Commission[5] and the role of Consumer Protection is left to the National Consumer Commission (NCC)[6]. While this practice of separating agencies that deal with consumer protection and competition issues is becoming more prevalent, what matters is whether those specific institutions are efficient in performing those roles.
Consumer Protection Trends
Based on the latest available information, the Authority handled 178 consumer complaints. This means that at least one complaint was filed for every 270,000 Kenyans. Out of the 178 complaints, 39 cases were in the manufacturing sector, 37 cases in the finance and insurance, 12 cases for transportation and storage and 2 cases for the accommodation and food services sectors. The 178 cases in the financial year 2019/2020 reflected a 28% increase from the 2018/2019 financial year. The Authority attributes this to continued consumer rights campaign initiatives, including the creation of awareness to the consumers at the County level and increased media campaigns[7].
Some Notable Observations
- The Competition Authority of Kenya should review its complaints mechanism with the view of making the process faster and more simplified.
- The Competition Authority of Kenya should make the resource argument to Parliament for hiring staff dedicated to helping the citizenry in filling consumer complaints given the diversity and complexity of consumer issues.
- While Article 46 spells out the mandate for Consumer Protection, it’s important to note in practical terms that the mandate is shared by different agencies. For example, while the Kenya Bureau of Standards might be responsible for the public safety dimension of consumer protection, the consumer protection mandate for healthcare or Engineering services can only be handled by the Kenya Medical Practitioners and Dentists Council[8] and the Engineers Board of Kenya (EBK)[9] The law enabling Article 46 of the Constitution should be cognizant of the same to allow for flexibility in enhancing consumer protection in Kenya.
- While the Competition Authority of Kenya is supposed to be autonomous, the selection and population of the members of the Authority suggest otherwise. The Authority consists primarily of a chairman, Principal Secretaries of finance and trade (or their representatives), Attorney General, Director General of the Authority, five other members appointed by the Minister. The solution is to have an independent selection committee whose role is to select members of the Authority, and their term ends once they have settled on qualified candidates.
- At the Authority level, the decentralization and autonomy of the divisions of the Authority are based on the major functions of Competition Authority as outlined by the law. This allows broad-based specialization to happen.
- The research role for competition and consumer protection should be separated to allow for growth in the capability to grow knowledge on trends of consumer issues and how they can be enforced.
- The findings of publicly available Economic research should inform enforcement action. This proposal illustrates that research should have shown how pervasive financial scams and frauds, and subsequent measures to address consumer protection issues.
Conclusions
The place of consumer protection is firmly in the constitution. The three main issues coming from this piece that is of going concerns is efficiency in enforcement measures, governance framework of the Competition Authority and how it affects consumer protection, and the ability of the Authority to be able to deal with upcoming issues in the consumer protection landscape. In conclusion, while the mandate of the Competition Authority of Kenya might be strongly founded in the Constitution, the performance is still in a long way to go.
References
[1] Czech Trade Inspection Authority. “History of Consumer Rights Protection – COI.” www.coi.cz, 2003. https://www.coi.cz/en/about-ctia/history-of-consumer-rights-protection/.
[2] “Consumer Rights | Boundless Business.” Lumenlearning.com, 2019. https://courses.lumenlearning.com/boundless-business/chapter/consumer-rights/.
[3] Maciej Bukowski, and Tomasz Kaczor. Contribution to Growth: Consumer Protection. 2019. European Parliament.
[4] Michael R. Baye. The Economics of Consumer Protection, Antitrust, and Policy.
[5] The Competition Commission of South Africa. 2022. https://www.compcom.co.za/
[6] National Consumer Commission (NCC). 2022. https://www.thencc.gov.za/
[7]Competition Authority of Kenya FY 2019/2020 Annual Report. https://www.cak.go.ke/planning/annual-reports
[8] Kenya Medical Practitioners and Dentists Council https://kmpdc.go.ke/
[9] Engineers Board of Kenya (EBK). https://ebk.go.ke/
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Occupational licensing is widespread in Kenya, particularly in professions such as law and medicine, and it sparks debate in law and economics. In Kenya, occupational licensing is provided for through a set of statutes. This has implications for markets of legal service provision, which we discuss in this blog. Why is occupational licensing now a […]
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It has always been difficult to tie Mr. Trump’s statements to his subsequent policy actions. That fact qualifies any certainty in discerning his implications for Kenya’s macro now. But in three areas, the Kenyan macroeconomic authorities should be on high alert. The Kenya Shilling For much of 2024, the Central Bank of Kenya (CBK)has been […]
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