Nigeria’s National Agency for Food & Drug Administration & Control (NAFDAC) has issued new regulations prohibiting the use and trade, in skin bleaching agents and certain other chemicals used in formulating beauty products. In many ways, the New Regulation signals the seriousness with which the NAFDAC now wants to pursue the prosecution of persons involved in the trade and personal use of prohibited bleaching agents. Perhaps the most telling signal from NAFDAC is the expansion of the scope of persons that are criminally liable under the New Regulation. Under the New Regulation, the class of people that are now personally criminally liable, in additional to individuals acting alone, include, (a) every director, manager, secretary or officer of a company (b) every partner or officer in a partnership (c) every trustee of any associations or similar bodies (d) every person concerned in the management of an association (e) anyone purporting to act in the capacities specified in (a) to (d). Penalty for offences under the New Regulation includes fines, imprisonment and seizure.
The New Regulations have implications for directors, managers and shareholders (Key Persons) of grocery stores/supermarkets, pharmacies and importers/manufacturers of cosmetics and beauty products in Nigeria. In Ghana, where a zero-hydroquinone policy was introduced, the local cosmetics association, challenged Ghana’s Food & Drug Agency in court, albeit without much success.
In this update, we provide a highlight of the New Regulation and its implications for player’s in Nigeria’s Beauty & Cosmetics Industry in Nigeria
1. Which Cosmetic Products Are Prohibited under the New Regulation?
The cosmetic products which are prohibited are:
(a) Cosmetic products that contains more than 2% of hydroquinone alone or 1% in combination with other lightening ingredients;
(b) Cosmetics products which contains any substance which when used according to the direction on the label accompanying the cosmetic product is likely to cause injury to the health of the user.
(c) Cosmetics products which contain mercury and mercury compounds and corticosteroids
(d) Adulterated Cosmetics ( See definition below)
2. What Trading Activities Are Prohibited Under the New Regulation?
The Prohibited trading/business activities in relation to prohibited cosmetic products, under the New Regulation are:
(d) Display for Sale
(e) Offer for Sale
3. What Other Important Additions Did the New Regulations Introduce?
It would appear that the New Regulations also criminalizes the “use” of the prohibited cosmetics products. In effect, persons who do not engage in any of the prohibited trading activity as aforementioned, but apply the prohibited products on their skin, may also be criminally liable. Based on the wording of the New Legislation, Nigerians are prohibited from:
(a) Applying to their body/skin, any Adulterated Cosmetics
(b) Applying to their body/skin any cosmetic product, that contains any substance which when used according to the direction on the label accompanying the cosmetic product is likely to cause injury to the health of the user.
(c) Applying to their body/skin any cosmetic products which contain mercury/mercury compounds and corticosteroids
4. How Does the New Regulation Define Cosmetics?
“Cosmetics” is defined to mean –
“any substance or mixture of substances intended to be rubbed, poured, sprinkled or sprayed, introduced into or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness or altering the complexion, skin, hair or teeth and includes deodorants and detergent powder”. The point to note here really is that the definition of “cosmetics” under the New Regulation covers a broad range of beauty and personal care products, to include powder/make-up, cleansers, scrubs, hair products, deodorants and other personal care products.
5. How Does the New Regulation Define Adulterated Cosmetics?
Adulterated Cosmetics is defined to mean any of the following, that is if the said cosmetic/cosmetic product
(a) Contains more than a trace of mercury or any mercury salt which under normal manufacturing practice is unavoidable;
(b) Contains more than a trace of mercury or any mercury salt calculated as the metal or preservative;
(c) Contains beyond 1% of hydroquinone and any of the three forms of arbutin;
(d) Contains any poisonous or deleterious substances that will render it injurious to a user under the conditions prescribed in its labeling or under such conditions of use as are customary or usual for the cosmetic product;
(e) Has been prepared, packed or held under unsanitary conditions which render t injurious to health;
(f) The container in which it is packed is composed in whole or in part of poisonous or deleterious substances which may render the contents injurious to health;
(g) Contains more than the permissible limit of an ingredient
(h) Revalidates any information originally indicated on its label or container by the manufacturer.
It is important to note that the NAFDAC has also issued Advertising Regulations which prescribe minimum standards for advertising beauty/cosmetic products in Nigeria. A broad-based internal compliance team will require a review of all related NAFDAC regulations in order to avoid the occurrence of regulatory action.
i. We think that grocery stores/supermarkets and pharmacies will be exposed to a higher degree of legal risk just by the fact that they are non-core beauty industry players and they stock a variety of personal care products. Products that offend the New Regulations can easily slip through the cracks. The current practice where suppliers merely fill out forms and submit sample products for internal approval leaves much to be desired. The way to manage that regulatory risk and to protect the Key Persons is to use contractual mechanisms to manage and shift the burden of legal risk that would have otherwise attached to the Key Persons and to set up a well-documented and compliant supply chain management system that filters out supplies that can expose the Key Persons to regulatory action.
ii. The Cosmetics & Beauty Care Products industry in Nigeria is still largely import driven. Importers and large distributors will also need to deploy contractual mechanisms to manage and shift the burden of legal risk that would have otherwise attached to the Key Persons and to set up a well-documented and compliant supply chain management system that filters out supplies that can expose the Key Persons to regulatory action.
iii. We think that there will be progressive regulation of beauty chemicals in line with global regulatory trends around skin bleaching agents globally. The global trends in this area has centered around banning over –the-counter-sales of hydroquinone or other bleaching agents, requirement of regulatory approvals and medical prescriptions or outright ban of such cosmetic products. In Ghana, the FDA was able to enforce a complete ban on cosmetic products containing of hydroquinone, mercury and steroids, despite legal action against Ghana’s FDA by the local cosmetics association.
iv. There is an emerging class of beauty entrepreneurs in Nigeria who engage in the formulation and/or mixture of different organic products and beauty chemicals. There is a need for such beauty entrepreneurs to review their commercial and go-to-market strategy especially in terms securing legal protection of unique beauty formulations and negotiating the appropriate commercial agreements necessary to extract value from their intellectual property.
v. Generally, we expect that the Beauty & Cosmetics industry in Nigeria is on a growth trajectory, driven by the growth of its middle-class. We expect to see more strategic partnerships and joint ventures between global beauty firms and local entrepreneurs with unique formulations or knowledge of the local market.
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