Reporting requirements for defective products in South Africa

Reporting requirements for defective products

What requirements are there to notify government authorities (or other bodies) of defects discovered in products, or known incidents of personal injury or property damage?

The SAHPRA has issued guidelines (Guidelines: Reporting of ADRs) for the reporting of adverse drug events or experiences and adverse drug reactions (ADRs). The NCC has been tasked, by section 60(1) of the CPA, to develop and promote industry-wide codes of practice (codes of practice) making provision for the adoption and application of systems to deal with certain events relating to unsafe goods and product defects. Such systems should make provision for receiving notice of consumer complaints, reports of product failures, defects or hazards, and of goods returns because of product failures, defects or hazards. These systems should also make provision for monitoring and analysing information sources relating to such product events, conducting investigations concerning such events, which include investigations into the nature, causes, extent and degree of the risk to the public, and to notify consumers in relation thereto, and finally for the recall of unsafe goods. The provisions of the CPA do not expressly require that suppliers must notify the NCC if defects are discovered in products or if incidents of personal injury or property damage occur arising from such defects.

No codes of practice have to date been implemented. The NCC has, however, issued Consumer Product Safety Recall Guidelines (the NCC Recall Guidelines). The NCC Recall Guidelines lay down recall procedures in general terms and urge suppliers to adopt recall policies. While it is submitted that the NCC Recall Guidelines are not currently legally enforceable, it is suggested that if a supplier encounters a situation where a product recall may be appropriate, it should report this to the NCC and carry out any recall reporting and implementation in close consultation with the NCC. It should also closely adhere to the procedures set out in the NCC Recall Guidelines.

What criteria apply for determining when a matter requires notification and what are the time limits for notification?

The CPA distinguishes between manufacturing defects, design defects, failures, hazard and unsafe goods. Goods are ‘unsafe’ when particular goods present an extreme risk of personal injury or property damage to the consumer or to another person. ‘Defects’ include both manufacturing defects (when a material imperfection in the manufacture of the goods or components renders the goods less acceptable than persons generally would be reasonably entitled to expect in the circumstances) and design defects (when any characteristic of the goods or components renders it less useful, practicable or safe than persons generally would be reasonably entitled to expect in the circumstances). A ‘failure’ means the inability of the goods to perform in the intended manner or to the intended effect.

At the time of writing, all notification to the NCC and recalls subject to the CPA can be described as ‘voluntary’. In terms of the NCC Recall Guidelines, a supplier should, as soon as it becomes aware of a possible safety hazard (the term ‘safety hazard’ is not defined) in a consumer product that may cause injury to a person, conduct an assessment comprising:

• gathering and assessing the reliability of all available information about the potential hazard;
• identifying how the problem occurred;
• conducting a comprehensive risk analysis; and
• examining means of addressing the safety-related hazard and deciding whether the product can be repaired or modified.

The NCC requires a supplier to contact it when commencing with such an assessment, even though the notification to the NCC is not currently a legal requirement. However, it is nevertheless submitted that when a supplier becomes aware that product defects or failures may be connected with or result in death of, injury to, illness, loss of or physical damage to property, or any resulting economic loss, a supplier should initiate a review of the available information with a view to identifying the possible ‘safety hazard’, bearing in mind the guideline that the NCC should be contacted when such process of identification becomes an ‘assessment’. The requirement that the NCC should be contacted when the assessment is ‘commenced’ implies that the NCC should become involved at a very early stage of the detection and consideration of product safety concerns, even if such concerns were to turn out to be unfounded.

To which authority should notification be sent? Does this vary according to the product in question?

Notification with regard to product recalls generally must be addressed to the NCC. The supplier has the prime responsibility for implementing a recall. A recall should be implemented in accordance with the supplier’s recall policy and after consultation with the NCC. In order for the NCC to be assured that a product safety risk will be effectively mitigated, it requires that the supplier undertakes the following actions:

• notify the NCC of the recall, which includes providing details of other entities within the supply chain that have been notified of the recall;
• prepare and submit to the NCC a recall strategy;
• retrieve the affected product from consumers and from within the supply chain; and
• report on the recall to the NCC.

A supplier’s recall strategy should include:

• an explanation of the problem, including the hazard associated with the product and the supplier’s assessment of the risk posed by the product;
• the number of units supplied in the market;
• information about any known injuries, the proposed communication with consumers, complaint handling procedures, the manner in which the recalled product will be collected, destroyed or rectified; and
• relevant contact details.

In the case of foodstuffs, cosmetics, disinfectants and medicines, notifications should be addressed to the Department of Health. ADRs must be reported to the SAHPRA. If a pharmaceutical company receives a report of a suspected adverse reaction to a medicine marketed by another applicant for the registration of that medicine, such report should, in terms of the Guidelines: Reporting of ADRs, be forwarded to the applicant for the registration of that medicine.

What product information and other data should be provided in the notification to the competent authority?

In terms of the Guidelines: Reporting of ADRs, an adverse drug reaction report form (ADR Form) is available from the National Adverse Drug Event Monitoring Centre (NADEMC). Applicants may also use their in-house report forms, if such forms include all the necessary data elements in a readable format. Applicants should submit not only the minimum information required for a report but all the relevant information available at the time of initial notification of an adverse drug reaction report. Applicants are encouraged to attach discharge summaries, post-mortem reports, relevant laboratory data and other additional clinical data. The applicant must submit the name (or initials), address, telephone number and qualification of the initial reporter on the ADR Form.

In terms of the NCC Recall Guidelines, notification to the NCC may be effected through use of a Recall Notification Form (RN Form) supplied by the NCC. The RN Form must state that goods are subject to a recall. The nature of the problem or non-compliance must be stated in the RN Form if the goods contain a defect, have a dangerous characteristic, or do not comply with a prescribed consumer product safety standard. Use of the RN Form is regarded as fulfilling the NCC’s notification requirement, although use of such form is not expressly required by the NCC Recall Guidelines. The RN Form requires information regarding the product, identifying numbers relating to the product, points of sale and periods of sale, the life span of the product, the supplier, elements of the marketing chain such as details of the manufacturer and the country of origin, the nature of the defects and hazards, what consumers should do and advertising relating to the recall.

What obligations are there to provide authorities with updated information about risks, or respond to their enquiries?

In respect of medicines, summary reports must be submitted annually to the NADEMC by applicants for the registration of medicine. These reports must, inter alia, include:

• the local usage of each formulation for the review period;
• a concise critical analysis of the reported ADRs for each medicine;
• the actions taken or to be taken (including actions taken by any other regulatory authority or marketing authorisation holder);
• a simple risk-benefit statement for ongoing use and monitoring of the medicine; and
• a line listing that includes the source, patient gender and age, formulation, daily dose, treatment dates and duration or time to onset, adverse reactions, seriousness, outcome and comment.

Owners of food-handling enterprises are required, in terms of the regulations issued under the FCDA, to implement ‘HACCP systems’. This is a hazard analysis and critical point system that identifies, evaluates and controls hazards that are significant for food safety. HACCP systems must comply with the principles as provided for by the Joint Food and Agricultural Organization/World Health Organization Food Standards Programme Codex Alimentarius Guidelines. In terms of the NCC Recall Guidelines, a supplier must furnish the NCC with regular progress reports.

What are the penalties for failure to comply with reporting obligations?

Penalties in terms of the CPA are mainly administrative, although a failure to comply with a compliance notice issued by the NCC constitutes an offence. Failure to comply with the FCDA is punishable by a fine or imprisonment and forfeiture of any foodstuff, cosmetic, disinfectant, appliance, product, material, substance or other object in respect of which the offence has been committed. Failure to comply with the MRSA may constitute an offence or result in the compulsory return of undesirable medicines to a manufacturer or importer or the disposal thereof, or in the suspension or revocation of certain dispensing, wholesaling, manufacturing, import or export licences. Recalls in terms of the CPA are currently voluntary. It is nevertheless suggested that any recalls falling within the domain of the CPA should be conducted on the basis of the NCC Recall Guidelines.

Is commercially sensitive information that has been notified to the authorities protected from public disclosure?

There are three main sources of potential protection against disclosure of information disclosed to the NCC in terms of the NCC Recall Guidelines: the CPA itself, other statutes such as the Promotion of Access to Information Act, Act 2 of 2000 (www.justice.gov.za/legislation/acts/2000-002.pdf), and the rules of legal professional privilege in terms of the common law. It is submitted that the rules of legal professional privilege will not apply in respect of information furnished to the NCC in terms of the NCC Recall Guidelines.

A person may, when submitting information in terms of the CPA to the NCC, NCT, or an inspector or investigator appointed in terms of the CPA, claim that all or part of that information is confidential (confidentiality claim). This confidentiality protection arguably does not apply to information supplied to the NCC on a voluntary basis. Any confidentiality claim must be supported by a written statement explaining why the information is confidential. The NCC, NCT, an inspector or investigator, as the case may be, must consider any confidentiality claim and must notify the claimant whether or not the information claimed to be confidential will be treated as such. When making any ruling, decision or order in terms of the CPA, the NCC or NCT may take into account any information that has been the subject of a confidentiality claim. If any reasons for a decision in terms of the CPA would reveal any information that has been the subject of a confidentiality claim, the NCC or NCT, as the case may be, must provide a copy of the proposed reasons to the party claiming confidentiality at least five business days before publishing those reasons.

A party may apply to a court for an appropriate order to protect the confidentiality of the relevant information within five business days after receiving a notice or a copy of proposed reasons regarding a confidentiality claim. Rule 12 of the NCC Rules deals with processes for the disclosure of ‘restricted information’. In terms of section 107(1) of the CPA, it is an offence to disclose any personal or confidential information concerning the affairs of a person obtained in carrying out any function in terms of the CPA or as a result of initiating a complaint or participating in any proceedings in terms of the CPA. Section 107(1) does not apply to information that is imparted to the NCC for the purposes of the NCC Recall Guidelines, and such information also does not qualify as restricted information.

May information notified to the authorities be used in a criminal prosecution?

Section 34 of the MRSA provides that no person may, except for the purpose of the exercise of his or her powers or the performance of his or her functions under the MRSA, for the purpose of legal proceedings under the MRSA, when required to do so by any competent court or under any law, or with the written authority of the director general, disclose to any other person any information acquired by him or her in the exercise of his powers or the performance of his functions under the MRSA and relating to the business or affairs of any person. Section 32 of the NRCSA permits any person who was concerned in the performance of any function in terms of the NRCSA, to disclose any information which he or she obtained in the performance of such a function, if such information is required in terms of any law or as evidence in any court of law, or to any competent authority that requires it for the institution, or an investigation with a view to the institution, of any criminal prosecution. The FCDA does not contain comparable provisions. The NCC may refer alleged offences in terms of the CPA to the National Prosecuting Authority and may disclose personal or confidential information concerning the affairs of any person obtained in carrying out any function under the CPA for the purpose of the proper administration or enforcement of the CPA or the administration of justice.

The court has a discretion, both in civil and criminal proceedings, to allow evidence despite the fact that it had been obtained through violation of the constitutional rights of the accused person (FEDICS Group (Pty) Ltd and another v Matus and others; FEDICS Group (Pty) Ltd and another v Murphy and others 1997 4 All SA 14 (C)).