Performance audit: Protecting Consumers through Market Surveillance Directorate Monitoring Role

The Auditor General reported that the Market Surveillance Directorate (MSD) within the Malta Competition and Consumer Affairs Authority (MCCAA) is fulfilling and marginally surpassing its EU obligations related to the number of inspections associated with the monitoring of safety of products placed on the market. However, this performance audit noted that the opportunity exists to strengthen this regulatory function. These conclusions were reached through two case studies, namely children’s products and pesticides. Despite the product diversity, generally, these case studies raised similar concerns.

The Directorate’s market surveillance initiatives do not fully address the safety risks posed by specific products or product categories. The absence of formal and structured risk analysis restricts broad inspection targeting at retail outlets selling Children’s Products. On the other hand, MSD’s inspection targeting for pesticide residue levels on agricultural produce is effectively limited to traceable products and those retailed through the Pitkali and Farmers’ markets. Market surveillance effectiveness is, to varying degrees, also influenced by long lead-times in conducting tests as well as the limited follow-up action. The foregoing does not guarantee that substandard products are withdrawn or withheld from retail.

Two main factors contributed to these operational issues. Firstly, the public information mechanisms at MSD’s disposal are not fully synchronised to ascertain that consumers are informed about non-conforming products at the earliest opportunity. Secondly, an enforcement gap exists due to the need for more effective coordination between National Entities to ascertain a broader coverage of the supply chain as well as to reach a wider spectrum of products.

Despite the signing of three Memorandum of Understanding (MoU) with other National Entities, cooperation has still not reached the expected levels. Both case studies revealed that discussions between National Entities on their respective jurisdiction and coordinated initiatives are on-going. The recently introduced policy, ‘Improving Business Inspections’ and the draft ‘National Agricultural Policy for the Maltese Islands’, recognise these issues and encourage more effective communication channels between National Entities, while minimising the burden of compliance costs to economic operators.

The level of resources at MSD’s disposal as well as procedural and management information weaknesses are the major limiting factors to a broader approach to product safety monitoring. This performance audit detected other limiting factors influencing MSD’s work. To this end, online shopping and imports that may bypass product safety-related border controls severed product safety related verifications. The absence of locally available accredited testing laboratories also influences the regulatory function intended to ascertain consumer protection from substandard products available on the market.

The Report proposes a number of recommendations aimed at the strategic and operational levels.