Who is protected by the Georgian government – entrepreneur or the consumer?

According to the EU Charter of Fundamental rights, an integral part of European values is that the government protects the consumer’s rights. But while the Georgian government claims to be on course towards integration with Europe, it still manages to do this integration in a way so that the Georgian consumers’ interests are harmed.

In 2010, within the frameworks of the preliminary negotiations with EU about ‘the deep and comprehensive free trade agreement’, the Georgian government produced three very significant national strategies in the spheres of competition, product safety (full name: strategy of standardization, accreditation, conformity assessment, technical regulations and metrology sphere) and food safety. The strategies were prepared during two years in a strictly confidential manner. Despite a number of attempts, our organization wasn’t able to obtain the documents, not only from the state body involved, but even from parliament.

The way the preparation process of these documents was kept secret from civil society has given rise to a suspicion that the documents contained provisions which would have been unacceptable to society. Unfortunately, this turned out to be the case. The content of the strategies, and especially their implementation, serves to reduce the rights of the Georgian consumers and the government’s exemption from the obligation in terms of the state protecting the consumer.

An example of this is abolishing the law on Protection of the Consumer Rights at the end of 2011. In fact, this law represented an attempt to transpose several EU directives about protection of consumers’ rights into Georgian legislation. The law was really weak and old and needed improvement. Exactly this, the antiquity of the law, was used in the national strategy and action program ‘in the sphere of standardization, accreditation, conformity assessment, technical regulations and metrology’ to prove that the law should be abolished and its provisions be transferred to a new law – “Code on Product safety and free circulation”. This fact itself didn’t seem really alarming, unless we consider its implementation – specifically, which provisions got into the new code and which did not.

Specifically the consumer’s right to have a bought item (if defective) repaired, replaced or returned to the seller didn’t get into the new code. The consumer has this right according to the Georgian Civil Code, but in a general form. The law on Protection of the Consumers’ Rights made it significantly easier to exercise this right, because:

• It defined a minimum time period for the seller’s responsibility for a defect product – six months (except for perishable products). This term is less than an appropriate EU directive 1999/44/EC defines (2 Years), but it still was a concession to the Georgian consumer, which in case of the law’s abolition may be denied remedy for a defective product even the day after buying it.
• It put the burden of proof for a non-defective product on the seller at the time of sale – which is also less than directive 1999/44/EC defines (according to which, in case of discovering the defect during a six months period after buying of the product the defect is presumed  to exist at the time of sale) – but it was still concession for the Georgian consumer. In case of abolishing the law the burden pf proof will fully be transferred to the consumer.
• Defined a limited time period for exchanging or repairing the defective product and a responsibility of payment of a penalty to the consumer if the process took longer.

Since the law is to be abolished, all the mentioned provisions will be canceled and the Georgian consumers will lose appropriate protection of their rights.

It should particularly be mentioned that abolishing the above mentioned provisions wasn’t the result of some mistake or misunderstanding. Our organization was among NGOs which demanded to meet with the authors of the new bill after presenting it to parliament in September 2011; hoping that we could explain the shortcomings and would achieve an agreement about improving them. The authors of the code turned out to be the advisors of the Prime Minister, who explained to us that abolishing the consumers’ rights wasn’t a shortcoming – that it was an intentional action, because in their opinion, the law on the Protection of the Consumer Rights was unjustifiably idolising consumers; and that the consumer doesn’t need such paternalistic attitude from the government in Georgia and today the entrepreneur needs the government’s protection, not the consumer.

The second example of ignoring consumer rights is the food safety sphere. Since 2005, neither the production of food nor the food products placed on the market are controlled in Georgia. In 2010 the government stated that since 2011 it would restore the inspection of food production and distribution; and since 2012 the fining of the violators would begin. But only 56 enterprises were checked in 2010 (only those which export to Europe); and in 2011 it is planned to check 200 enterprises. All these ‘planned inspections’ are only conducted after notifying the entrepreneur several months before, , and it’s quite clear, it fits more to the interests of the entrepreneur than the consumer.

Of course, Georgian legislation foresees the possibility of unexpected and non-planned checking of food production and distributors: according to the law about the Food Safety and Quality, such checking would be conducted in case there is reason to suspect violation of the food safety requirements. The ground for such suspicion may be consumer complaints too. But in June of 2010 the government adopted a resolution, according to which unexpected checking of food production and distributors is only possible in case if there is a laboratory conclusion about unsafe food – so-called ‘proved doubt’. If we consider the fact that five days are needed for a micro-biological examination of food to be done and its price is more than 100 Georgian lari, it’s clear that such a requirement is a barrier for consumer complaints and an operative reaction on cases where there are such suspicions. Finally it serves to create a policy of ‘less disturbance’ to entrepreneurs.

But the reality is that the controlling body for food safety doesn’t conduct inspection even in case these complicated requirements are fulfilled by the consumers. For example, in October-November, 2011, our organization bought and studied, under laboratory conditions, several products on retail sale as a response to consumer complaints. Then we submitted the information to the National Food Agency (procurement and measurement documents, laboratory findings) about four specific cases when the sale of a product was dangerous to health (Coli bacteria found in meat products indicating fecal contamination). In none of the cases did the agency conduct a non-planned inspection of the appropriate entrepreneur – in return we received a message that they would foresee our information while preparing the inspection plan for 2012.

Even more – in 2011 the government prepared the new code on food safety, which fully excludes the possibility of non-planned inspection based on information provided by the consumers. According to this code, a non-planned inspection is only possible in case of mass injury or poisoning in the population; or based on the request of a state or law enforcement body. In fact, this means that entrepreneurs will be given the opportunity to violate any requirement of food safety, as long as it doesn’t cause mass injury to the population. This provision contradicts the requirement of the EU 882/2004 regulation, which the new code allegedly “conforms”. According to the 882/2004 regulation inspection of food operators as a rule should be conducted without prior warning, and should take account of any information indicating non-compliance with the food safety requirements;. And of course, this provision  contradicts the main consumer right – the right to safe food.

One more illustration of protecting entrepreneurs’ right at the consumers’ expense is the practice of systematically hiding information about dangerous food by the public services from the consumers and the relevant legislation. The 2010 resolution and the new code foresee the strictest responsibility of civil servants for spreading such information. According to the new code, it’s only possible to warn consumers about a dangerous products on the market on the basis of a governmental decision.

All the things mentioned above give us grounds to conclude that nowadays the Georgian government is purposefully and consistently trying to protect the entrepreneur from the consumers at the expense of the consumers and harming their interests; instead of protecting the consumers’ interests.