LCQ5: Law enforcement against unfair trade practices
Following is a question by Dr the Hon Helena Wong and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (February 15):
The Trade Descriptions (Unfair Trade Practices) (Amendment) Ordinance 2012 amended the Trade Descriptions Ordinance (Cap. 362) to crack down on common unfair trade practices such as false trade descriptions or representations in relation to goods or services. The relevant amendments came into full operation on July 19, 2013. In December last year, the findings of a test conducted by a Hong Kong university, which was commissioned by an environmental group, showed that among the seven seafood samples taken from supermarkets, four of them had labels bearing incorrect names or places of origin of food. For example, an areolated coral grouper was labelled as leopard coral grouper, the retail price of which is more than double that of the former. Regarding the enforcement of the aforesaid legislative amendments by the Customs and Excise Department (C&E), will the Government inform this Council:
(1) since the aforesaid legislative amendments came into operation, whether C&E has inspected supermarkets (i) proactively and (ii) upon receipt of complaints each year for the purpose of enforcing the provisions concerned; if C&E has, of the respective numbers of inspections; if not, the reasons for that;
(2) since the aforesaid legislative amendments came into operation, whether C&E has invoked the provisions concerned to institute prosecutions against supermarket operators who allegedly committed the relevant offences; if C&E has, of the number of convictions and the penalties generally imposed on the convicted persons;
(3) given that section 30L of Cap. 362 provides that an authorised officer may, with the consent in writing of the Secretary for Justice, accept a written undertaking given by a person who has committed the relevant offences not to continue or repeat the unlawful conduct covered by the ordinance or not to engage in conduct of that kind, or any conduct of a substantially similar kind, in the course of any trade or business, as an alternative to criminal prosecution, and that sections 30P and 30Q respectively provides that an authorised officer may apply to the District Court for an injunction or interim injunction to prohibit a trader from continuing or repeating the unlawful conduct, whether C&E has invoked such provisions since the legislative amendments came into operation; if C&E has, of the details; if not, the reasons for that; and
(4) whether C&E has other measures in place to prevent supermarket operators from contravening the requirements of the aforesaid legislative amendments, so as to safeguard the rights and interests of consumers; if C&E does, of the details; if not, the reasons for that?
The Government attaches great importance to protecting consumer rights. The Trade Descriptions Ordinance (the Ordinance) criminalises some commonly seen unfair trade practices. The Customs and Excise Department (C&ED) adopts a three-pronged approach to implement the Ordinance proactively, including law enforcement actions, compliance promotion and public education.
My reply to the four parts of the question is as follows:
(1) Since the amendments to the Ordinance which prohibit unfair trade practices came into effect on July 19, 2013, as at end-2016, C&ED initiated 46 inspections in relation to supermarkets' trade practices suspected of breaching the Ordinance. It also commenced investigation into 274 cases in response to complaints.
(2) From July 19, 2013 to end-2016, C&ED prosecuted eight cases in relation to supermarkets breaching the Ordinance. All of these cases resulted in convictions, with fines handed down by the Court ranging from $1,000 to $90,000.
(3) C&ED has so far not invoked sections 30L, 30P or 30Q of the Ordinance to deal with supermarkets suspected of breaching the Ordinance. As to other traders, C&ED has, under section 30L of the Ordinance and with the written consent of the Secretary for Justice, accepted from traders in 10 cases a total of 11 written undertakings to cease the relevant trade conduct.
Following investigation, C&ED decides on the appropriate enforcement tool or measure, such as criminal prosecution or civil enforcement actions, to be used by duly considering all relevant circumstances of the case, including the evidential proof, the nature and severity of the offence, the number of consumers affected, the extent of impact, whether the trader has any conviction record, etc.
(4) C&ED adopts a three-pronged approach in its implementation of the Ordinance, including law enforcement actions, compliance promotion and public education.
On enforcement, C&ED has all along been handling complaints proactively. It conducts in-depth investigation and evidence gathering, and takes appropriate enforcement actions in accordance with the particular facts and evidence of cases. Apart from processing complaints, C&ED also conducts risk and intelligence assessment, and initiates inspections in relation to the sales practices of supermarkets as and when necessary.
On compliance promotion, C&ED has organised six seminars for supermarket operators to date, with a view to strengthening understanding of the Ordinance among frontline staff and managers, and reminding them of the importance to comply with the fair trading provisions. Management staff is also urged to adopt suitable measures to prevent inappropriate trade conduct that would jeopardise consumer rights.
On public education, C&ED works with the Consumer Council and makes use of a variety of media to promote the concept of "smart consumption" in the community.
Ends/Wednesday, February 15, 2017