Select Committee on International Development Appendices to the Minutes of Evidence


Memorandum submitted by 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:


  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.


  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.


  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]


  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.


  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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