New law implicates the political insulation, structure, and power of Egypt’s consumer protection regulator.
Egyptian President Abdel Fattah el-Sisi recently ratified Law No. 181 of 2018, which regulates consumer protection. It repeals Law No. 67 of 2006, which regulated the consumer protection sector previously.
Article 27 of the Egyptian Constitution, as amended in 2014, stipulates that “the economic system shall…prohibit monopolistic practices” in the interest of “protecting consumers.” Comparatively, consumer protection is usually entrusted to independent regulatory bodies, so that economic sectors and activities can be regulated on the basis of technical expertise rather than political ones.
As a result of the new law, the legal status of the Consumer Protection Agency—first established by the repealed law—will see some changes. I analyze whether these changes enhance or limit the independence of the agency, its financial autonomy, its adjudicatory power, and its appointment power.
Articles 215 and 216 of the Egyptian Constitution provide that the legislature is authorized to establish independent bodies and oversight agencies with technical, financial, and administrative independence. But the institutional independence of the Consumer Protection Agency seems to be unchanged from what it was under article 12 of the repealed law. Although article 42 of the new law grants the agency legal personality, the legislature insisted on keeping the agency affiliated with the minister of supply and internal trade.
The legislature followed the exact same approach in the case of many other regulatory authorities: the Electricity Regulatory Authority, the National Telecommunications Regulatory Authority, and the Egyptian Competition Authority.
The real question here is, if the Egyptian legislature does not believe that such authorities devoted to regulating giant economic sectors and activities should be considered “independent bodies,” what kind of authorities do deserve this kind of independence?
As for financial autonomy, both article 20 of the repealed law and article 45 of the new law provide for an independent budget for the agency. But article 44 of the new law defines new resources that will fund the budget, which were not stated in the repealed law: fees that the agency may legally collect; 25 percent of amounts obtained from conciliations decided by the agency board with the accused in crimes violating the law; and amounts paid in return for studies and services offered by the agency.
Article 45 is well-drafted for purposes of financial autonomy, as is the case of other Egyptian regulatory authorities. The main characteristics of financial autonomy include diversity of resources, independence from the state’s public budget appropriations, and keeping certain fees used to fund its budget.
But one aspect of the agency budget in the new law is a step backward: the budget surplus. Under the repealed law, the budget surplus for the agency was carried over to the following year. Similarly, the budget surpluses for the Authority for the Protection of Competition and Prohibition of Monopolistic Practices, the Electricity Regulatory Authority, and the Telecommunications Regulatory Authority are also totally or partially carried over into the following year.
But article 45 of the new law provides that the budget surplus of the agency is to be carried over to the state’s public budget.
Under the repealed law, article 17 and articles 45 and 52 of its executive regulations governed the agency’s adjudicatory power. These articles provided for the establishment of quasi-judicial committees to issue decisions that amounted to appealable rulings of courts of first instance. These committees oversaw the settlement of disputes arising between consumers, suppliers, or advertisers under the consumer protection law.
But in an interview in October 2011, the Consumer Protection Agency head stated that he was seeking enforcement of some unenforced provisions of the law. In fact, according to my research these provisions seem to have never come into force and the committees seem to have never been established.
Article 52 of the new law provides that the agency board may establish committees to examine disputes arising between consumers, suppliers, or advertisers. The committees can then submit recommendations on these disputes to the agency.
It is clear that the adjudication power granted to the agency by the repealed law has never been practiced. The enactment clause of the new law gives the Economic Courts the jurisdiction to hear civil and commercial disputes over the application of consumer protection law. This practice has been in effect since Law No. 120 of 2008 established these courts.
First, although the repealed law gave the competent minister the power to choose the agency head, the new law gives the President of the Republic this power. Such a change, in my point of view, gives the agency some political support to carry out its powers. But it is unfortunate that the House of Representatives plays no role at all in terms of the appointment power of the agency board members or at least the agency head.
Second, although the repealed law established a three-year, once-renewable term for agency board members, the new law makes the term four years. But I believe that a non-renewable, five-year term would better maintain the agency’s independence. A five-year term would be greater than the President’s term of office, such that the agency board members would not—in an effort simply to seek reappointment—build their decision-making process on the President’s agenda or preferences.