In a speech last Thursday announcing the ACCC’s 2019 Product Safety Priorities, Chairman Rod Sims drew attention to the absence in Australian law of a general prohibition on the selling of unsafe goods, with particular reference to the example of sometimes-deadly button batteries.
Product safety regulation under the ACL
Currently, the Australian Consumer Law (ACL) gives the Minister the power to make safety standards for consumer goods and product related services, and the supply of goods or services that do not comply with an applicable safety standard may attract a pecuniary penalty. Safety standards have been published for a wide range of products. For example, toys for children up to and including 36 months of age must not have parts that can break off which are smaller than a certain size.
In addition, the Minister may impose an interim or permanent ban on consumer goods or product related services where it appears to the Minister that they may (including through a reasonably foreseeable use or misuse) cause injury to any person. Current safety bans are published on the Product Safety Australia website.
Similarly, the ACL contains provisions for product recalls and the mandatory reporting to the Minister of incidents involving serious injury being associated with a consumer product. Finally, one of the consumer guarantees relating to the supply of goods provides that goods must be of acceptable quality, which includes being safe and free from defects.
A new law against selling unsafe goods?
In his speech, Rod Sims noted that the current regulatory framework in relation to the safety of consumer goods is “primarily reactive”, since the laws “generally come into place after consumers have been harmed”. Although, for example, there is nothing in the current safety standards provisions which would prevent the Minister from making a prospective ruling about products that have not yet hit the market, in practice such standards are only likely to be enacted once a product has been demonstrated to have caused some kind of harm.
What Australian consumer law does not contain, and what Sims suggested it should have, is a general prohibition on the selling of unsafe goods. Sims pointed out that many OECD countries’ laws already include such a provision. For example, in the United Kingdom, the General Product Safety Regulations 2005 (UK) impose a general duty on producers to only place onto the market products that are safe in normal or reasonably foreseeable use.
The safety prohibition being advocated by the ACCC is presumably intended to be different from and additional to the existing consumer guarantee noted above, as the advocated prohibition would presumably trigger pecuniary penalties and other consequences not available for a breach of the consumer guarantees.
Sims said that, on average, there are two deaths and 145 injuries per day that are caused by unsafe consumer products. Further, the ACCC estimates that, each year, the cost of harm from unsafe consumer goods in Australia is at least $5 billion.
From a policy perspective, Sims argues that a general safety provision as exists overseas would benefit not only consumers (who would enjoy greater confidence in their purchases) but also businesses (which would benefit from a level playing field in which companies supplying unsafe products could not profit from them).
The 2019 Product Safety Priorities and button batteries
As part of this year’s Product Safety Priorities, announced during Sims’s speech, the ACCC will focus on a range of particular consumer goods. One such focus is ensuring the effectiveness of the continuing compulsory recall of vehicles with Takata airbags. Another is supporting strategies that help prevent injuries and deaths to children caused by button batteries.
Button batteries are small (generally with a diameter less than 32mm), circular batteries that are often found in consumer products such as TV remotes, kitchen scales, watches and thermometers. Because of their size, they inherently present a potential choking hazard for children.
In a report by CHOICE released on the same day as Rod Sims’s speech, it was found that around 20 children present to hospital emergency departments every week in Australia due to a suspected button battery ingestion or insertion. There have also been two button battery-related deaths so far in Australia.
Importantly, the majority of potentially hazardous consumer products containing button batteries are not subject to mandatory safety standards (with the exception, for example, of toys for children up to three years old which specifically must not contain small parts). This position was noted in the ACCC’s 2016-2018 National Strategy for Improving the Safety of Button Battery Consumer Products, which will be evaluated as part of its 2019 Product Safety Priorities.
In 2016, the ACCC introduced a voluntary industry code for consumer goods that contain button batteries. Among other recommendations, the code provides that such goods should be manufactured in such a way that the batteries are not accessible to young children.
In its report on Thursday, CHOICE found that product makers are in large part ignoring the industry code. In particular, out of 17 common household items tested by CHOICE, 10 of them apparently did not comply with the code because their button battery was easily accessed.
While it may be that the presence of a general prohibition in the ACL on the supply of unsafe products would reduce the risks posed by button batteries, it remains to be seen whether Rod Sims’s legislative proposal is taken up by the Australian Parliament.