Professional Documents
Culture Documents
Source: Manual on Consumer Protection United Nations Conference on Trade and Development (UNCTAD) 2004
Consumer Rights
John F. Kennedys Message to Congress on
March 15, 1962 Four basic rights
Right Right Right Right to to to to safety be informed choose be heard
to to to to
standards Adequate distribution channels and after sales services Fair business practices are employed Protection against contractual abuses Information is adequate for consumers to make informed decisions and exercise choice
5. Redress
Establish and publicize mechanisms that are fair, affordable and accessible Especially taking into consideration the needs of
low-income consumers
Food production
Sustainable agricultural polices and practices Conservation of biodiversity Traditional knowledge
Drinking water
National policies should be developed to improve supply, distribution and quality of water for drinking and other purposes
Pharmaceuticals
Develop national policies to ensure appropriate use, procurement, distribution, production, licensing arrangements, registration systems and information to consumers
governmental committees Enforce consumer protection and competition law Conduct market surveys and research into consumer protection problems Conduct product testing for safety and quality
Consumer organizations
Need for an independent party that is nonpolitical and non-commercial Need for views of the under-represented and vulnerable groups Some have wide membership and broad spectrum of concerns Democracy involves participatory decisionmaking ; consultation with these groups is part of the nation-building process
consumers Conduct surveys and research to study problems faced by consumers or the impact of government policies on consumers Engage in dialogue with government and business to inform, persuade or negotiate on behalf of consumers
Trend is to include the right to development In constitutions adopted since 1980s, consumer
third generation or solidarity rights
rights recognized as human rights Thus included in the constitutions of many countries Recognize disparity of knowledge, resources and bargaining power and provide for consumer rights
Consumer Redress
Problems include:
Expense Length of time Alienation Adversarial
Alternatives
Facilitating access to courts Legal aid for the needy Contingent fee system Permit paralegals to perform attorney functions Court substitutes (ADR) Statute-based tribunals Arbitration Ombudsman
Fairness
Transparency Effectiveness
Part II: Consumer Protection in the Marketplace Consumer Information and Choice
Consumer information ideally is meant to
provide standardized, objective and impartial information direct to consumers at the point of sale, in order for them to decide which of the many branded products and services available will best suit their own needs.
labels subject to mandatory labeling laws, such as pharmaceuticals) consumers have relatively few problems Where information is unregulated (e.g., advertising or unregulated labels) consumers have more problems
Sometimes offset by information from independent consumer groups
Information on imported products Many dont comply with voluntary labeling Information provided electronically over the internet (later)
1. Preparatory action
Surveillance of products in the market Data collection (local and foreign sources) Consolidated List of Products Whose Consumption and/or
Sale Have Been Banned, Withdrawn, Severely Restricted, or Not Approved by Governments
2. Regulatory action
Development of product safety standards
3. Monitoring action
Testing by government or reliable independent consumer organizations
4. Corrective action
Impose product bans Warning notices Product recalls Seize stocks Destroy stocks Require modifications of the product
5. Compensatory actions
Compensate consumers for loss Deter future wrongdoing
Consumer Credit
Credit increases demand for and
consumption of goods and services Critical to economic growth Unfettered growth of credit has negative consequences
Impulse buying Extra costs associated with credit Excessive debt
Ineligible for credit in many stores; thus buy shoddy goods at higher prices If credit advanced, higher rates charged
history of default Increased complexity of transactions (e.g. home equity loans/lines of credit) require more complex documents
More difficult to understand and compare terms, including cost of credit
Electronic commerce
1996 fewer than 40 million connected to internet 1997 number increased to 96 million 2005 predicted to be nearly 1 billion 1998 27.6 million buying goods and services
online worth $32 million 2002 more than 128 million spending over $425 million
Issues:
Consumer redress in cyberspace disputes Privacy Identification of provider Security of payments Fraud
Development (OECD) United Nations Commission on International Trade Law (UNCITRAL) Alliance for Global Business (AGB)
Objectives of consumer education are: Develop skills to make informed decisions in the
purchase of goods and services in light of
Personal values Maximum utilization of resources Available alternatives Ecological considerations Changing economic conditions
consumer rights, in order to participate effectively and confidently in the marketplace and take appropriate action to seek redress Develop an understanding of the citizens role in the economic, social and government systems and to influence those systems to make them responsive to consumer needs
of the facts, the consumer will be able to make the best use of his resources, money, time, knowledge and ability. He will thereby contribute to the proper functioning of the economy and stimulating effective and fair competition and he will thereby contribute to social and economic development.
Council of Europe (1981)
reflects the inter-relationship between the private household and societal responsibilities Concepts such as sustainable consumption are woven into education about the impact of modern consumer lifestyles on the environment In developing countries, consumer education is a tool to ensure that scarce resources of poorer consumers are not fritted away by unethical business practices
Those outside formal education Mass media Trade associations Trade unions Resident associations Special focus on Rural areas Low income Vulnerable groups (seniors; disabled)
Utilities
Utilities are considered basic needs Universal Declaration of Human Rights
states that everyone has the right of equal access to public services in his/her country
supply Over 1 billion lack access to clean water One half of the worlds population has made a phone call 5% of the world uses the internet
88% of those are in developed world (15% of worlds population)
Consequences
Consumption is encouraged No incentive to conserve shortages Governments dont have the money to invest in infrastructure improvements or pay off debts
Privatization is controversial
Results in increased cost to consumers Some consumers may not be able to afford it Governments must raise prices to make sale possible; profit
of buyers factored in
Potential abuses of monopoly power Improvements to infrastructure and potential extension of service to additional consumers may be offset by refusal to extend to non-profitable areas
Buyers tend to be western multi-nationals Loss of economic independence Foreign owners dictating terms Concentration of developing world resources in
western ownership
safe, nutritious and culturally acceptable and is available, accessible and affordable to all people
Hunger Facts
There is enough food to feed all the
people in the world
4.5 pounds per person per day
Vulnerability to price and supply fluctuations and political upheaval Subject to manipulation by transnational corporations Undermine livelihood of farmers
Consumer groups should focus government attention on: Promoting food security and improved access to food Reconciling demand for cheap food with adequate
compensation to farmers
Address underlying causes of poverty Give priority to production of staple foods for domestic
consumption Address issues that contribute to food security
Urbanization Land degradation Water scarcity
Food safety
Food safety risks are increasing
Movement of food and live animals across borders Changes in food handling Emergence of new pathogens
Direct risk through application process Indirect risk through toxic residues in food
countries Protect health of consumers and ensure fair practices in food trade Membership of 165 countries representing 98% of world population
Codex committees
Meat and poultry hygiene Food additives and contaminants Pesticide residues Residues of veterinary drugs in foods Food hygiene Animal feeding Biotechnology
Sustainable Consumption
strain the environment Outcome of the development model the North follows and the South emulates Sustainable consumption is viewed as the only long-term strategy for survival
Obstacles
Ignorance Inequality
We dont know level of per capita consumption the planet can sustain Differences within and between nations make developing a common agenda difficult Existing political and economic mechanisms for addressing major international problems of the environment are inadequate
Institutions
Successes
Growth in use of material resources has
slowed as a result of shifts in demand towards less material-intensive products Emissions have been reduced as a result of tighter regulations and incentives Municipal waste growth has slowed or declined
Obligations of government
UN Guidelines on Consumer Protection: Minimize resource utilization Exercise leadership Reinforce values
E.g., greater efficiency in use of energy Adopt and enforce regulations Consumer education programs for consumers on impacts of their choices and behavior
Develop technological and social innovations to improve quality of life and tackle depletion of resources Use media and advertising to promote sustainability Create markets that reflect real economic, social and environmental costs Create opportunities for the poorest segments of society
Obligations of consumers
CI urges consumer organizations to:
Educate members on sustainable consumption in order to change attitudes and behavior Provide information to consumers on products and services and demand that same be provided by merchants Regularly assess environmental aspects of products Represent the environmental interests of consumers at all relevant national and international forums
that benefit the environment; but may not make significant changes in buying habits, pay markedly higher costs, or make changes in basic lifestyles. Yet sustainable consumption calls for such effective approaches. Consumer conscience has to be sufficiently modified such as to effect changes in behavior. This is the ultimate challenge for the consumer movement. Consumers have to be convinced that when they vote with their pockets they are in fact exercising a social, moral and political responsibility that goes beyond their own parochial interests and their present generation.