South Africa’s decision on the labelling of products originating in “Occupied Palestinian Territory”
Sean Woolfrey, tralac Researcher, discusses South Africa’s decision on the labelling of products originating in “Occupied Palestinian Territory”
On August 22, the South African Cabinet released a statement approving a Department of Trade Industry (DTI) notice requiring South African traders to refrain from labelling goods produced in “Occupied Palestinian Territory” (OPT) as Israeli products. Cabinet’s decision to approve the notice drew an angry response from the Israeli government, with Israel’s Foreign Ministry describing the move as being “without precedent” as constituting “blatant discrimination based on national and political distinction” and as potentially “fostering a general boycott”. South Africa’s ambassador to Israel was also summoned to Jerusalem to explain the South African government’s decision.
Much of the furore surrounding this decision has come from a misreading of the South Africa’s actions. First of all, the South African government is not seeking to ban or restrict goods from OPT, but simply to ensure that they are not misleadingly labelled. Indeed, when issuing the notice earlier this year the DTI stated that its aim was to ensure that South African consumers would be provided with accurate information regarding the origins of the goods they purchased. Secondly – and this is a point that seems to have been missed in many of the reports of South Africa’s actions – no requirement to label these goods as ‘Made in Palestine’ has been introduced.
The DTI notice, issued in terms of Section 24 of the Consumer Protection Act (No. 68 of 2008) requires “traders in South Africa, not to incorrectly label products that originate from the Occupied Palestinian Territory (OPT) as products of Israel”. In other words, the notice does not create an obligation to label OPT goods as ‘Made in Palestine’. Instead, it is simply seeking to ensure that such goods are not labelled ‘Made in Israel’. For the most part, these goods need not be labelled with their country of origin at all, as, apart from certain classes of goods, such as foodstuffs, foreign goods traded in South Africa are not required to bear a label stating their country or place of origin.
In this way, the DTI notice simply reaffirms existing South African law as contained in the country’s Consumer Protection Act. Under Section 24 of the Act, no person may apply to a product a description which is likely to mislead the consumer as to the true place or country of origin of that good. So, for instance, it is illegal for a South African importer to place a label on a good stating that the good is ‘Made in Germany’ if in fact that good comes from China. In addition, retailers are prohibited from selling a good if they know or have reason to suspect that a description applied to that good is likely to mislead the consumer as to the true place or country of origin of that good. This means that a South African supermarket may not sell a product with a ‘Made in France’ label if it is known or suspected that that good was in fact manufactured in another country.
In terms of South African law, the important question in the case of goods produced in OPT, is whether a ‘Made in Israel’ label can be considered to be misleading as to the true place or country of origin of that good. Given that the West Bank settlements in which the goods in question are produced are viewed as illegal under international law and therefore cannot be considered part of the State of Israel, it surely follows that the true ‘place or country of origin’ of these goods is not in fact Israel, and, therefore, that any descriptions (including labels) that state their country of origin as Israel are indeed misleading.
In terms of international trade law, the requirement prohibiting the misleading labelling of goods from OPT does not contravene South Africa’s obligations as a member of the World Trade Organisation (WTO). As a WTO member, South Africa must ensure that its regulations concerning labelling (and other) requirements for imports from other WTO members are consistent with its obligations under the various WTO agreements to which it is party. One of the general principles of WTO trade law is that a member cannot discriminate against imports from another member. This most-favoured nation (MFN) principle means that South Africa cannot, under normal circumstances, introduce regulations that would discriminate against the importation of goods produced in a fellow WTO member such as Israel.
In the case of OPT products, however, WTO law does not apply as the goods in question are not products of Israel – or of any other WTO member for that matter, as Palestine is not a WTO member – and are therefore not covered by WTO law. As WTO agreements do not cover the goods of non-WTO member states, South Africa could treat OPT imports in any way it liked, by, for example, requiring ‘Made in Palestine’ labels or banning such imports outright, and it would still not be in contravention of its WTO obligations. It appears, therefore, that the precise requirements entailed in the DTI notice are: i) already required by existing South African legislation; ii) entirely consistent with the country’s WTO obligations; and iii) less restrictive than other measures which could be adopted by the South African government without contravening international law.
This is not the end of the story, however, as the government notice states that the “burden for proving” where products originate from “will lie with traders”. By contrast, the Consumer Protection Act requires only that persons do not “knowingly” mislead customers, and that retailers do not sell a product if they “reasonably could determine” that the label of that product is likely to mislead customers. The enforcement of the regulation regarding goods carrying a ‘Made in Israel’ label, and, in particular, the requirement that traders are responsible for determining the true origin of these goods – a requirement that is absent from the Consumer Protection Act and therefore would seem not to apply in the case of goods imported from other countries – could open South Africa up to the charge that this measure could result inde facto discrimination against products imported from Israel, a charge which could potentially lead to a WTO dispute.
Ahren, R. 2012. ‘South Africa’s ambassador summoned to Jerusalem over decision to label settlement goods,’ The Times of Israel, 22 August. Available online at: http://www.timesofisrael.com/its-final-south-african-will-slap-west-bank-goods-with-occupied-palestinian-territory-labels/
Crawford, J. 2012. Opinion – Third Party Obligations with Respect to Israeli Settlements in the Occupied Palestinian Territories. Available online at: http://www.tuc.org.uk/sites/default/files/tucfiles/LegalOpinionIsraeliSettlements.pdf
Department of Trade and Industry. 2012. Notice 379 of 2012: Labelling of Products Originating from Occupied Palestinian Territory Wrongly Labelled as Originating in Israel in Terms of Section 24 of the Consumer Protection Act, Act 68 of 2008 (ACT). Available online at: http://www.exclaim.co.za/fileadmin/May_2012/Document%205.pdf
Government of the Republic of South Africa. 2012. Statement on the Cabinet meeting of 21 August 2012. Available online at: http://www.gcis.gov.za/content/newsroom/media-releases/cabstatements/22Aug2012
Government of the Republic of South Africa. 2008. Consumer Protection Act, Act No 68 of 2008. Available online at: http://www.saflii.org/za/legis/num_act/cpa2008246.pdf
Smith, D. 2012. ‘Israel condemns South Africa for re-labelling of West Bank products,’ The Guardian, 23 August. Available online at: http://www.theguardian.com/world/2012/aug/23/israel-south-africa-west-bank-label