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MEA calls for liability insurance on imported good

MEA calls for mandatory liability insurance on imported goods

The New Zealand Manufacturers and Exporters Association (MEA) says that mandatory product liability and warranty insurance applied to all imported goods would ensure they comply with New Zealand safety standards and provide local companies with a level playing field when competing with cheaper, and possibly lower quality imports.

The MEA’s comments follow Bindeez’s recall of a line of products made in Hong Kong.

“In the contest between cheap imported goods and New Zealand made products, consumer safety is often taken for granted and operating a “post market” approach whereby we do not ensure product standards until there is a problem, presents a case of ‘buyer beware’”, says Chief Executive John Walley.

Mr. Walley says that ongoing discussions are taking place within the MEA to determine what possible measures the Government could introduce to address the issue of compliance and safety.

One of the suggestions to emerge is to treat all importers as deemed manufacturers and require mandatory public liability and warranty insurance in regard to consequential loss associated with all imports.

“Once the importer has product liability insurance in place, performance can be underwritten with product warranty insurance attached to long lived products, or accessible in distribution channels for disposable products”, says Mr. Walley.

“Should the importer go out of business or cease to continue importing that particular product, the warranty would still be valid in regard to product performance, and consequential loss would be an issue for the insurance companies involved to sort out. This would serve to underpin compliance with New Zealand’s safety requirements”.

There is the potential for importers to pass the insurance costs to retailers, yet the MEA says that this would go some way to balance safety and compliance costs already carried by local manufacturers.

“Under current conditions, importers side-step compliance costs and have a comparative advantage over local companies, although with the decision to support dumping duties in favour of Croxley Stationary last month, the Ministry of Economic Development has shown that it is prepared to act and offer a measure of protection for a local company against unbalanced competition”, says Mr. Walley.

“However, in the wake of yet another product safety scare this week, further steps are needed and product liability and warranty insurance on imports is one of a range of measures that could be used to protect New Zealand’s consumers, and level the playing field for local firms”.

ENDS

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