APPENDIX 30
Memorandum submitted by Consumers International
ABOUT CONSUMERS
INTERNATIONAL
1. Founded in 1960, Consumers International
(a non-profit organisation registered in the Netherlands as the
International Organisation of Consumers Unions, registration number
SI 49999) is a federation of consumers' organisations dedicated
to the protection and promotion of consumers' interests worldwide
through institution building, education research and lobbying
of international decision-making bodies. An independent, non-profit
foundation, Consumers International has 269 member organisations
in 112 countries worldwide.
2. Consumers International strives to foster
social justice by protecting the rights and responsibilities of
all consumers particularly the poor, powerless and marginalised.
Consumers International aims to contribute to creating an enabling
environment where all people have the strength, information and
support to have what they need to live in comfort and safety and
are able to participate and have influence in decisions that affect
their lives. It aims to enhance democracy and human development
through supporting the growth of a strong consumer movement in
all parts of the world. It monitors the globalisation of the world
economy from the point of view of consumers and conducts research,
builds capacity, informs, educates and lobbies on behalf of the
international consumer movement.
3. Consumers International is funded by
fees from member organisations and by foundation and government
grants. It works with consumer organisations at the national,
regional and international level through its London-based Head
Office, its Regional Offices in Santiago, Chile; Kuala Lumpur,
Malaysia and Harare, Zimbabwe and its Office for Developed and
Transition Economies, also based in London. For further information,
please visit our website: www.consumersinternational.org
CONSUMERS AND
GLOBALISATION
4. Globalisation is framed firstly by factors
accelerating global integration. These factors include the liberalisation
of trade and capital flows and also changing technology leading
to improved communications and transport. This allows for greater
movement of people, goods, information, images and knowledge resulting
in changing patterns of production, consumption and distribution.
Globalisation is then defined by the institutional responses to
such changes at various levels—global, regional, national
and local.
5. Factors, which control the size, nature
and focus of the impact of globalisation, need to be harnessed
to make sure that the poor benefit directly and indirectly. Consumers
International believes that by promoting people's rights as consumers
through consumer policy and independent consumer organisations,
the needs of the poor are better heard, the marketplace becomes
more just and the quality of people's lives improves. Much attention
is given to the impact of globalisation on people's incomes—but
what is important for social and economic development is its impact
on individuals' purchasing power, empowerment and the resulting
quality of life. Consumer policy is the flipside of income generation
to achieve these goals. It works by facilitating limited incomes
to go as far as possible, by improving awareness of individual's
rights and ensuring that the quality and safety of goods and services
is secure and constantly improving.
6. Gaps in development today translate into
more than a billion people worldwide being deprived of basic consumption
needs. Of the 4.4 billion consumers in developing countries:
— nearly three-fifths lack basic sanitation;
— about a third have no access to clean
water;
— one quarter do not have adequate
housing;
— one fifth have no access to modern
health services; and
— about a fifth do not have enough
dietary energy and protein.
7. These are but a few highlights of under-consumption
and human deprivation from the UNDP Poverty Report of 1998. However
the White Paper "Eliminating World Poverty: Making Globalisation
Work for the Poor" fails to recognise the impact of globalisation
on poor consumers and therefore offer solutions which will limit
the negative aspects of globalisation.
8. The need for concerted action has been
acknowledged by the White Paper, however the strong and innovative
responses needed are lacking. In this memorandum, Consumers International
will highlight just a few areas where the White Paper should have
been clearer and stronger. In particular, the role of consumer
organisations in developing economies has been ignored.
9. Consumer organisations have a valuable
role to play in enabling peoples' participation in poverty eradication
and sustainable social development. However, this local-level
consultation and decision-making can only be encouraged within
a broader policy framework, both at national and international
levels. While sustainable productivity and effective distribution
of resources are necessary for poverty alleviation, the poor must
be organised and politicised to ensure that they gain and maintain
access to credit, services and meaningful employment. One workable
solution is the broader policy framework to have key features
of a good consumer policy.
ROLE OF
CONSUMER POLICY
TO POVERTY
ERADICATION
Consumer policy can significantly contribute
to:
10. Eradicating poverty: consumer policy
and consumer organisations attack many of the unjust elements
that cause poverty such as poor access to goods and services.
Consumer organisations lessen isolation and helplessness by providing
access to information, representation and influence. Consumers
advocate policies that promote fairer markets thus increasing
purchasing power and reducing poverty.
11. Encouraging successful market operation:
To encourage markets to work fairly and transparently, consumer
organisations analyse market imperfections, investigate anti-competitive
practices, assess consumer attitudes and experiences, carry out
product and services testing and evaluation, complaints handling
and information and education programmes. This improves the quality
and relevance of products and services thereby improving the efficiency
of the market. Consumer organisations provide a voice for consumers
and act to monitor, guide and promote the need for regulation
of the market to protect and promote consumer rights.
12. Encouraging market competition: Imperfect
competition exists between countries and there are different levels
of competitive safeguards that apply between jurisdictions, ranging
from effective and well-established competition laws in some jurisdictions
to no laws in others. This can lead to transnational corporations
taking advantage of the lack of laws, or a laxity in application
of laws in one jurisdiction, to make up for the inability to engage
in profit making restrictive practices in another. There is also
the scope for these corporations to circumvent individual countries
regulatory regimes through intra-firm transactions. Competition
policies are made more effective when there are symmetrical competition
laws effectively enforced between countries, there is cooperation
between competition enforcement agencies to share information,
and where consumers and business are empowered to take private
action to seek redress. The policies are also made more effective
when consumers are empowered to make informed decisions, and when
they contribute to monitor anti-competitive practices and exert
consumer purchasing power to sanction such practices.[48]
13. Good governance and democracy: enhancing
consumer participation in the policy making process is manifestation
of good governance and democracy. Furthermore, consumer organisations
act as watchdogs and monitor governance and industry. Consumer
involvement in the process of planning, implementing and assessment
of policies, legislation and services helps ensure due transparency
and accountability. Corporations spend billions of dollars on
market research. Government policy must also have support of its
populace. Therefore, consumer involvement in the process of planning,
implementing and assessment of policies, legislation and services
helps ensure proper focus in addressing consumer concerns safeguarding
public interest as well as ensuring due transparency and accountability.
14. Encouraging sustainable development
and consumption: Consumer policy can set guidelines and standards
for production and for the level of information that should be
provided to consumers on environmental factors. Consumer organisations
monitor progress and encourage consumers and industry to act for
a more sustainable lifestyle.
COMPONENTS OF
CONSUMER POLICY
The main elements of a comprehensive consumer
policy are regulation, information, education and representation.
15. Regulation:Consumer policy ensures that
appropriate regulations are set and effectively implemented to
benefit and protect all consumers. This includes legislation,
standards and guidelines. Regulations may be in the form of specific
consumer protection laws or as part of policies in other areas,
for example, health, agriculture, trade and industry, housing
and sanitation, economic planning, standards statistics, weights
and measures and food and nutrition.
To provide a legal basis for enforcing basic
consumer rights, every country needs to have an irreducible minimum
of consumer protection legislation, covering physical safety,
promotion and protection of consumers' economic interests, standards
for the safety and quality of goods and services, distribution
facilities, redress, and education and information programmes
as outlined in the UN Guidelines for Consumer Protection (1985).
Governments are required to have the necessary machinery to enforce
such legislation.
Regulation takes place at all levels: local,
national, regional and international. As economic deregulation
and liberalisation increases around the world, more and more decisions,
which effect consumers, are being made at the international level.
16. Information Consumer policy ensures
that consumers are presented with all information necessary to
enable them to satisfy their consumer rights. This includes information
about products and services, legislation and judicial mechanisms
as well about their rights and responsibilities.
This covers areas particularly related to the
labelling and advertising of products, but also to the information
about the way the product or services has been produced. Consumers
also need easy access to information about their rights, how to
insist on them, where to get further information, advice and representation.
17. Education Consumer policy ensures that
people have the appropriate skills and knowledge to be in a position
to actively ensure they have and can exercise their consumer rights.
Consumer education may advise on consumer rights
and local consumer legislation. It may inform people how to assess
the quality and safety of goods and services. It may inform people
how to complain and to influence discussions that affect their
lives. It aims to develop awareness and provide support that will
encourage people to work together to address their problems as
consumers.
It may promote healthy lifestyles and consumption
patterns. Consumer education includes for example education on
nutrition, information on hygiene, on foodstuffs and medicinal
drugs.
18. Representation All policy decisions
need to take into account the impact on consumers. Policy makers
should listen to experts who represent consumers. Solutions which
involve people in the decision making process are more likely
to be sustainable. Representation by consumer representatives
in the development of policies and regulations is vital to achieving
transparent and participatory governance.
Consumers need both access to collective representation
and individual representation. Consumer organisations play an
important role in representing consumers both formally, through
being part of the formal consultative or decision-making processes
and informally, through lobbying and campaigning.
Representation is participation and is integral
to poverty eradication, good governance, democracy, access to
justice, transparent, fair, efficient market economies and sustainable
social development.
19. Governments, the United Nations and
other development agencies are increasingly aware that by empowering
people as consumers they are making important contributions to
human social development. For example, the African, Caribbean,
Pacific and European Union (ACP-EU) countries have incorporated
consumer policy and protection and the need for strong independent
consumer organisations in the Cotenu Convention.[49]
POOR CONSUMERS
AND THE
WHITE PAPER
20. The White Paper fails to recognise the
special needs of the 4.4 billion poor consumers in developing
countries. Consumers are only mentioned as a Northern phenomenon.
21. For example, consumer health policy
work has many purposes, but the important issues are the relationship
between consumer organisations and individuals who need to be
empowered to negotiate the systems wherever they live. Many consumer
organisations work directly to help empower consumers/users of
health services, for example, by providing help lines, information
services, advice on legal issues and other health care matters.
This involves promoting the individual's knowledge and ability
to stand up for themselves as well as making more general representations
to politicians, legislators, and other decision-makers.[50]
Consumer organisations work to monitor the quality
of and access to basic health care, for example, through the media
and by lobbying for the protection of patients' right through
either legislation or other means. They can help decide how priorities
should be set and monitor the costs of health care to the individual,
such as the price medicine, laboratory services, doctors' fees
and insurance costs. They can work towards educating consumers
and enhancing consumer rights by networking locally, nationally
and internationally with consumer organisations and other NGOs.
Sustainable and efficient health care systems
need to be encouraged in developing countries. Affordable medicines
are a priority especially for HIV/AIDS. Local consumer organisations
can help ensure that health care systems are meeting the needs
of local people.
22. Illiteracy is still the biggest enemy
of consumer interests. Consumers who are illiterate are often
victims of contracts that they cannot read, never mind interpret.
Consumers are often expected to depend on salespeople who are,
in most cases, driven by the commission motive to sell more. Illiterate
consumers can sometimes commit all their lives savings, or even
of those of their children, without understanding what the implications
are. In general, illiterate consumers cannot exercise their rights
to information about goods, services and suppliers. In many countries,
ignorance is not grounds for defence in a civil action. This leaves
illiterate consumers with very little redress in a case of dispute
emanating from a contract.[51]
In developing countries, it is common practice
among manufacturers to use different labelling standards for the
communities that they know have a high level of illiteracy. For
example, manufacturers may use a picture of an orange on a bottle
of orange-flavoured drink to make the consumer think that it is
orange juice or pictures of cubed pieces of meat on a tin of meat
flavoured to make them think that it contains real meat. Illiterate
consumers cannot critically interpret advertisement and as a result
fall prey to false advertising.
Consumer organisations ensure that policies,
laws, and corporate practices take into account the needs of the
youngest and most disadvantaged consumers. They campaign against
those who exploit illiteracy or other constraints. The promotion
of education is always important. An important element of education
with globalisation is consumer education and awareness
especially for poorer people.
23. As a result of UK funding, consumer
organisations in Latin America have been active on public utilities
in promoting opportunities and examining barriers to gaining universal
access to drinking water and sewage treatment. The involvement
of user groups in the privatisation of public utilities is a critical
factor in the successful and sustainable supply of basic services
to poor consumers. The UK Government should develop further its
support for the involvement of consumer organisations in public-private
partnerships for infrastructure development.
PROCESS OF
DEVELOPING THE
WHITE PAPER
There has been some level of consultation with
civil society groups in the development of the White Paper, but
key constituents have been excluded. Consumers International suggested
a meeting between DFID officials and representatives of the international
consumer movement which was turned down. As far as we are aware
there was no consultation with consumer groups in the drafting
of the Paper which explains the one dimensional nature of some
of the solutions offered.
For example on Competition, the White Paper
recognised the need for competition policy to be promoted but
then does not develop this and describe the necessary conditions
for a competition culture to encourage smaller producers in the
marketplace, fair competition etc. For competition policy to be
effectively implemented, strong independent consumer organisations
are essential.
Jayanti Durai
Consumers International
January 2001
48 An African Trade Minister once said "Our country
has decided to liberalise its economy in order to meet local consumption
needs and to export with a view to getting revenues, facilitating
growth and dealing with repayment of debts. For this reason, we
are going to create on the one hand, a favourable environment
for our producers and industrialists, and on the other, we will
provide to the consumer organisation the means to spur competitiveness,
improve the quality, and safety of goods and services, as well
as offering the best prices". This kind of strategic economic
and social development shows clearly the role that the consumer
movement is called upon to play in a market environment where
there is disengagement by the state, economic liberalisation policies,
globalisation of exchanges and multi-nationalisation of economies. Back
49
ACP-EU Negotiations "Partnership Agreement Between the African
Caribbean and Pacific States and the European Community and Its
Member States", signed on 23 June 2000. Back
50
"Health Care in A Changing World: Patients Rights and Responsibilities",
Consumers International, 1996. Back
51
Empowering Disadvantaged Consumers, Consumers International, 1995. Back
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