What is the so-called ‘supply chain’ referred to in the Consumer Protection Act (CPA) and what are the liability implications? Should tourism product and service suppliers be worried? “Yes indeed,” says tourism legal specialist, Advocate Louis Nel.

“Supply chain is defined in the CPA as follows: “The collectivity of all suppliers who directly or indirectly contribute in turn to the ultimate supply of those goods or services to a consumer, whether as a producer, importer, distributor or retailer of goods, or as a service provider,” he says

In other words, the CPA applies equally to everyone in the supply chain. Therefore, all risk to passengers must be disclosed and EVERYBODY in the supply chain needs to do this.

SAITB’s Cecily Melia says the EU Directive, similarly, makes all tour organisers selling travel packages in the European Union liable to the client for any damages or injury resulting from the failure to perform or improper performance of the contract, no matter who is responsible or where it occurs.  She says the similarly enabling UK legislation is called the ‘Package Travel, Package Holiday and Package Tour Regulations of 1995’.  

In terms of South Africa’s CPA, liability is, however, not automatic, says Nel. “The claimant still has to prove either breach of contract or negligence, the latter including the issue of duty of care.” The exception to this being Section 61 of the CPA, in terms of which such negligence is not required and liability is absolute. “Your mere involvement/presence in the supply chain is enough!” warns Nel.

He summarises Section 61 as follows:

  • It applies to the supply of unsafe goods; product failure, defect or hazard; and inadequate instructions or warnings provided to the consumer pertaining to any hazard arising from or associated with the use of any good. Nel says suppliers need to bear in mind this includes not only verbal instructions, but any stickers/labels on the goods in question where these may be outdated or illegible.
  • Goods or products can include vehicles hired and many events that fall under adventure tourism, e.g. white-water rafting, canoes, quad bikes (including defective helmets) and the instructions that accompany these or are issued by the suppliers, i.e. third-party suppliers engaged by the travel agent, tour operator or DMC.
  • Even though the travel agent, tour operator or DMC may not have produced such goods or product, it can be deemed to fall in that category if, as part of the services they provide, they supply, install or provide access to any goods, e.g. something as simple as a chair in a conference room, food or parking.     
  • The liability is extremely wide and pertains to ‘harm’ defined as including the following: death or injury; illness; any loss of or damage to movable or immovable property; and economic loss, the latter being inclusive of loss of income.
  • The liability can be apportioned between all the parties involved in the supply chain. 

Nel says it is therefore imperative for travel agents, tour operators and DMCs to have proper up-to-date T&Cs, indemnities, contracts with travel product suppliers that MUST include indemnities and a proper vetting of the supplier’s reputation and risk management; and insurance.

“This is where the in-depth and detailed customer briefing is a very important document. Bring to the attention of all clients all risks pertaining to the trip of which they should be aware; and ensure you are in compliance with the following sections of the CPA:

  • Section 41 and 48: Ensure your advertising, T&Cs, and booking forms are not misleading or deceptive; and clarify any ‘misapprehensions’ immediately.
  • Section 49: Unusual risks, risks not reasonably expected, or which may result in serious injury or death, must be explained and drawn to the attention of the customer in plain language, conspicuously and acknowledged by the client and as early as possible!
  • Section 51: Restates the sections above but adds that liability may not exclude or be limited to gross negligence.