consumer protection by teghi foundation

1. Consumer ProtectionConsumer Protection
Source: Manual on Consumer ProtectionSource: Manual on Consumer Protection
United Nations Conference on Trade andUnited Nations Conference on Trade and
Development (UNCTAD)Development (UNCTAD)
20042004

2. Overview: Three broad categoriesOverview: Three broad categories
• 1. Consumer Protection System1. Consumer Protection System
– Policies, laws, institutions and structuresPolicies, laws, institutions and structures
that form the framework for a consumerthat form the framework for a consumer
protection systemprotection system
• UN GuidelinesUN Guidelines
• Consumer Protection Agencies/OrganizationsConsumer Protection Agencies/Organizations
• Consumer Protection LawConsumer Protection Law
• Consumer RedressConsumer Redress

3. • 2. Consumer Protection in the2. Consumer Protection in the
MarketplaceMarketplace
– Various transactions that consumers enter inVarious transactions that consumers enter in
a market economya market economy
• Consumer informationConsumer information
• Product safety and liabilityProduct safety and liability
• Consumer creditConsumer credit
• InsuranceInsurance
• Electronic commerceElectronic commerce

4. • 3. Consumer Protection and Basic Needs3. Consumer Protection and Basic Needs
– Consumer educationConsumer education
– The provision of utilitiesThe provision of utilities
– FoodFood
– Health care deliveryHealth care delivery
– Sustainable consumptionSustainable consumption

5. Part I. Consumer ProtectionPart I. Consumer Protection
SystemSystem
Rationale for consumer protectionRationale for consumer protection
• Addresses disparities in consumer-Addresses disparities in consumer-
supplier relationshipsupplier relationship
– Bargaining powerBargaining power
– KnowledgeKnowledge
– ResourcesResources

6. • State intervention premised on grounds ofState intervention premised on grounds of
– Economic efficiencyEconomic efficiency
– Individual rightsIndividual rights
– Distributive justiceDistributive justice
• Achieving bargaining equality between consumer andAchieving bargaining equality between consumer and
producer interestsproducer interests
• Alleviating the problems of the particularly disadvantagedAlleviating the problems of the particularly disadvantaged
– Poor, elderly, childrenPoor, elderly, children
• ““Consumerism, especially in the developing world, is nowConsumerism, especially in the developing world, is now
seen as a fundamental part of the strategy to eradicateseen as a fundamental part of the strategy to eradicate
poverty and to bring socio-economic justice to thepoverty and to bring socio-economic justice to the
underprivileged.”underprivileged.”

7. – Positive communal valuesPositive communal values
– Right to developmentRight to development

8. Consumer RightsConsumer Rights
• John F. Kennedy’s Message to CongressJohn F. Kennedy’s Message to Congress
on March 15, 1962on March 15, 1962
• Four basic rightsFour basic rights
– Right to safetyRight to safety
– Right to be informedRight to be informed
– Right to chooseRight to choose
– Right to be heardRight to be heard

9. • 1982 Consumer International’s Charter of1982 Consumer International’s Charter of
Consumer RightsConsumer Rights
• Eight rightsEight rights
– Right to basic needsRight to basic needs
• Food, clothing, shelter, health care, education,Food, clothing, shelter, health care, education,
water and sanitationwater and sanitation
– Right to safetyRight to safety
– Right to informationRight to information
– Right to choiceRight to choice

10. – Right to be heardRight to be heard
– Right to redressRight to redress
– Right to educationRight to education
– Right to healthy environmentRight to healthy environment
• Rights further re-enforced by adoption ofRights further re-enforced by adoption of
UN Guidelines on Consumer Protection inUN Guidelines on Consumer Protection in
1985 and 19991985 and 1999

11. Who is the “consumer”?Who is the “consumer”?
• Original definition limited to purchases forOriginal definition limited to purchases for
“personal consumption”“personal consumption”
• More recently includes small operatorsMore recently includes small operators
– Applies to farmersApplies to farmers
– Assures reasonable prices and quality of farmAssures reasonable prices and quality of farm
inputsinputs

12. Who is responsible for consumerWho is responsible for consumer
protection?protection?
• Government agenciesGovernment agencies
– Ministry of Commerce, Investment andMinistry of Commerce, Investment and
Consumer AffairsConsumer Affairs
• Professional/Industry associationsProfessional/Industry associations
• Consumer organizationsConsumer organizations
– St. Lucia Consumer AssociationSt. Lucia Consumer Association

13. U.N. Guidelines on ConsumerU.N. Guidelines on Consumer
Protection (UNGCP)Protection (UNGCP)
• Provide a framework for governments toProvide a framework for governments to
develop and strengthen consumerdevelop and strengthen consumer
protection policies and legislationprotection policies and legislation
• Minimum guarantee by governments thatMinimum guarantee by governments that
the measures will be undertakenthe measures will be undertaken

14. Obligations imposed onObligations imposed on
governments by the UNGCPgovernments by the UNGCP
• 1. Physical Safety1. Physical Safety
– Assure that products are safe and conform toAssure that products are safe and conform to
safety standardssafety standards
– Consumers receive information on proper useConsumers receive information on proper use
of goods and risks involvedof goods and risks involved
– Measures are in place for notification andMeasures are in place for notification and
recall of unsafe goodsrecall of unsafe goods

15. • 2. Consumers’ economic interests2. Consumers’ economic interests
– Consumers obtain optimum benefit from theirConsumers obtain optimum benefit from their
economic resourceseconomic resources
• Ensuring that goods meet production and performanceEnsuring that goods meet production and performance
standardsstandards
• Adequate distribution channels and after sales servicesAdequate distribution channels and after sales services
• Fair business practices are employedFair business practices are employed
• Protection against contractual abusesProtection against contractual abuses
• Information is adequate for consumers to make informedInformation is adequate for consumers to make informed
decisions and exercise choicedecisions and exercise choice

16. • 3. Standards for safety and quality of3. Standards for safety and quality of
goods and servicesgoods and services
– Ensure there are national standards for safetyEnsure there are national standards for safety
and quality of goods and servicesand quality of goods and services
– Such standards conform to internationalSuch standards conform to international
standardsstandards
– Facilities to test and certify goods andFacilities to test and certify goods and
services are encouragedservices are encouraged

17. • 4. Distribution facilities for essential goods4. Distribution facilities for essential goods
and servicesand services
– Especially to consumers who areEspecially to consumers who are
disadvantaged, e.g., in rural areasdisadvantaged, e.g., in rural areas

18. • 5. Redress5. Redress
– Establish and publicize mechanisms that areEstablish and publicize mechanisms that are
fair, affordable and accessiblefair, affordable and accessible
• Especially taking into consideration the needs ofEspecially taking into consideration the needs of
low-income consumerslow-income consumers

19. • 6. Education and information programs6. Education and information programs
– Should involve consumer and businessShould involve consumer and business
groupsgroups
– Particular attention to disadvantagedParticular attention to disadvantaged
consumers in urban and rural areasconsumers in urban and rural areas
– Should be included in school curriculumShould be included in school curriculum
– Training programs for educators, mass mediaTraining programs for educators, mass media
professionals and consumer advocatesprofessionals and consumer advocates

20. • 7. Promotion of sustainable consumption7. Promotion of sustainable consumption
– Should be done in conjunction with civilShould be done in conjunction with civil
society organizations and business groupssociety organizations and business groups
– Sustainable consumption practices withinSustainable consumption practices within
government, by business enterprises and bygovernment, by business enterprises and by
consumersconsumers

21. • 8. Measures relating to food, water and8. Measures relating to food, water and
pharmaceuticalspharmaceuticals
– Prioritizes these areasPrioritizes these areas
– Should ensure quality control, adequateShould ensure quality control, adequate
distribution and standardized informationdistribution and standardized information

22. • Food productionFood production
– Sustainable agricultural polices and practicesSustainable agricultural polices and practices
– Conservation of biodiversityConservation of biodiversity
– Traditional knowledgeTraditional knowledge

23. • Drinking waterDrinking water
– National policies should be developed toNational policies should be developed to
improve supply, distribution and quality ofimprove supply, distribution and quality of
water for drinking and other purposeswater for drinking and other purposes

24. • PharmaceuticalsPharmaceuticals
– Develop national policies to ensureDevelop national policies to ensure
appropriate use, procurement, distribution,appropriate use, procurement, distribution,
production, licensing arrangements,production, licensing arrangements,
registration systems and information toregistration systems and information to
consumersconsumers

25. Current status of UNGCPCurrent status of UNGCP
• UN is surveying countries’ adoptionUN is surveying countries’ adoption
• Many LDCs have nothing in placeMany LDCs have nothing in place
– No laws or consumer organizationsNo laws or consumer organizations
• Doesn’t fully account for globalization andDoesn’t fully account for globalization and
other changes in marketplaceother changes in marketplace

26. Functions of a consumer protectionFunctions of a consumer protection
agencyagency
• Advise the government on consumer issuesAdvise the government on consumer issues
• Represent the consumer interest in otherRepresent the consumer interest in other
governmental committeesgovernmental committees
• Enforce consumer protection and competitionEnforce consumer protection and competition
lawlaw
• Conduct market surveys and research intoConduct market surveys and research into
consumer protection problemsconsumer protection problems
• Conduct product testing for safety and qualityConduct product testing for safety and quality

27. Consumer organizationsConsumer organizations
• Need for an independent party that is non-Need for an independent party that is non-
political and non-commercialpolitical and non-commercial
• Need for views of the under-represented andNeed for views of the under-represented and
vulnerable groupsvulnerable groups
• Some have wide membership and broadSome have wide membership and broad
spectrum of concernsspectrum of concerns
• Democracy involves participatory decision-Democracy involves participatory decision-
making ; consultation with these groups is part ofmaking ; consultation with these groups is part of
the nation-building processthe nation-building process

28. Role of consumer organizationsRole of consumer organizations
• Provide independent information onProvide independent information on
products and servicesproducts and services
• Organize mass action, such as letter-Organize mass action, such as letter-
writing campaigns, boycotts, rallies, etc.writing campaigns, boycotts, rallies, etc.
• Advise and act on consumer complaintsAdvise and act on consumer complaints
and obtain redress for consumersand obtain redress for consumers
• Organize workshops and seminars onOrganize workshops and seminars on
particular issuesparticular issues

29. • Engage in public interest litigation on behalf ofEngage in public interest litigation on behalf of
consumersconsumers
• Conduct surveys and research to studyConduct surveys and research to study
problems faced by consumers or the impact ofproblems faced by consumers or the impact of
government policies on consumersgovernment policies on consumers
• Engage in dialogue with government andEngage in dialogue with government and
business to inform, persuade or negotiate onbusiness to inform, persuade or negotiate on
behalf of consumersbehalf of consumers

30. • Consult with stakeholders to understandConsult with stakeholders to understand
consumer issues and develop policy toconsumer issues and develop policy to
address problem areasaddress problem areas
• Organize public education programsOrganize public education programs
• Register and issue licenses for certainRegister and issue licenses for certain
business activitiesbusiness activities
• Issue administrative rules to regulateIssue administrative rules to regulate
business entitiesbusiness entities

31. Consumer Law: ConstitutionsConsumer Law: Constitutions
• Early constitutions focused on civil andEarly constitutions focused on civil and
political rights (“first generation rights”)political rights (“first generation rights”)
– Freedom and security of an individualFreedom and security of an individual
– Protection from state and public powerProtection from state and public power
• More recent constitutions confer widerMore recent constitutions confer wider
range of human rightsrange of human rights
– Economic, social and cultural rightsEconomic, social and cultural rights
– ““second generation rights”second generation rights”

32. • Trend is to include the right to developmentTrend is to include the right to development
– ““third generation” or “solidarity” rightsthird generation” or “solidarity” rights
• In constitutions adopted since 1980’s, consumerIn constitutions adopted since 1980’s, consumer
rights recognized as human rightsrights recognized as human rights
• Thus included in the constitutions of manyThus included in the constitutions of many
countriescountries
• Recognize disparity of knowledge, resourcesRecognize disparity of knowledge, resources
and bargaining power and provide for consumerand bargaining power and provide for consumer
rightsrights

33. Consumer Law: FrameworkConsumer Law: Framework
• Cover a broad range of practices, goods andCover a broad range of practices, goods and
servicesservices
• Create consultative bodiesCreate consultative bodies
• Vest agencies with rule-making powersVest agencies with rule-making powers
• Create special tribunals with simplifiedCreate special tribunals with simplified
procedures and rules of evidenceprocedures and rules of evidence
• Confer on consumer groups the right toConfer on consumer groups the right to
represent individualsrepresent individuals
• Provide for a range of remediesProvide for a range of remedies

34. Consumer RedressConsumer Redress
• Problems include:Problems include:
– ExpenseExpense
– Length of timeLength of time
– AlienationAlienation
– AdversarialAdversarial

35. • AlternativesAlternatives
– Facilitating access to courtsFacilitating access to courts
• Legal aid for the needyLegal aid for the needy
• Contingent fee systemContingent fee system
• Permit paralegals to perform attorney functionsPermit paralegals to perform attorney functions
– Court substitutes (ADR)Court substitutes (ADR)
• Statute-based tribunalsStatute-based tribunals
• ArbitrationArbitration
• OmbudsmanOmbudsman

36. • Assessing efficacy of ADRsAssessing efficacy of ADRs
– AccessAccess
• Widespread publicityWidespread publicity
• CostCost
• AccessibilityAccessibility
– FairnessFairness
• IndependentIndependent
– TransparencyTransparency
– EffectivenessEffectiveness
• Scope comprehensiveScope comprehensive
• Procedures simpleProcedures simple
• Rules of evidence relaxedRules of evidence relaxed
• SpeedySpeedy
• Decisions binding on industryDecisions binding on industry

37. Part II: Consumer Protection in thePart II: Consumer Protection in the
MarketplaceMarketplace
CConsumer Information and Choiceonsumer Information and Choice
• ““Consumer information ideally is meant toConsumer information ideally is meant to
provide standardized, objective andprovide standardized, objective and
impartial information direct to consumersimpartial information direct to consumers
at the point of sale, in order for them toat the point of sale, in order for them to
decide which of the many brandeddecide which of the many branded
products and services available will bestproducts and services available will best
suit their own needs.”suit their own needs.”

38. • Consumer information is especiallyConsumer information is especially
needed whereneeded where
– Products and services are high pricedProducts and services are high priced
– Products and services are technicallyProducts and services are technically
complexcomplex
– No basis of assessment at point of saleNo basis of assessment at point of sale
– Little consumer knowledge of requiredLittle consumer knowledge of required
performance before purchaseperformance before purchase

39. • Where information is regulated (e.g.,Where information is regulated (e.g.,
labels subject to mandatory labeling laws,labels subject to mandatory labeling laws,
such as pharmaceuticals) consumerssuch as pharmaceuticals) consumers
have relatively few problemshave relatively few problems
• Where information is unregulated (e.g.,Where information is unregulated (e.g.,
advertising or unregulated labels)advertising or unregulated labels)
consumers have more problemsconsumers have more problems
– Sometimes offset by information fromSometimes offset by information from
independent consumer groupsindependent consumer groups

40. • Additional problems arising fromAdditional problems arising from
expansion of international tradeexpansion of international trade
– Information on imported productsInformation on imported products
• Many don’t comply with voluntary labelingMany don’t comply with voluntary labeling
standardsstandards
– Information provided electronically over theInformation provided electronically over the
internet (later)internet (later)

41. Critical issues related to advertisingCritical issues related to advertising
• ““Commercial advertising, when it is practicedCommercial advertising, when it is practiced
fairly and responsibly, serves a useful function,fairly and responsibly, serves a useful function,
informing the public about the existence of ainforming the public about the existence of a
product and the characteristics of the product. Inproduct and the characteristics of the product. In
order to be a positive influence, advertisementsorder to be a positive influence, advertisements
must be truthful and informative, must notmust be truthful and informative, must not
exaggerate the usefulness or qualities of theexaggerate the usefulness or qualities of the
product and should not play on the emotionalproduct and should not play on the emotional
needs of the consumer so as to create artificialneeds of the consumer so as to create artificial
needs.”needs.”

42. • Consumer concerns with advertisingConsumer concerns with advertising
– Ads for products proven to be unsafe and/or addictiveAds for products proven to be unsafe and/or addictive
(e.g., alcohol and tobacco)(e.g., alcohol and tobacco)
– Ads that target and mislead vulnerable communitiesAds that target and mislead vulnerable communities
about the productabout the product
– Ads that aggressively target children to consumerAds that aggressively target children to consumer
foods high in fat, sugar and saltfoods high in fat, sugar and salt
– Ads for products that contain toxic or cancer-causingAds for products that contain toxic or cancer-causing
chemicals for which there is no scientific proof ofchemicals for which there is no scientific proof of
safety levels (e.g., pesticides, aspartame, etc.)safety levels (e.g., pesticides, aspartame, etc.)

43. • International codes on advertisingInternational codes on advertising
– WHO/UNICEF Code of Marketing ofWHO/UNICEF Code of Marketing of
Breastmilk Substitutes 1981Breastmilk Substitutes 1981
– FAO International Code of Conduct on theFAO International Code of Conduct on the
Distribution and Use of Pesticides 1985Distribution and Use of Pesticides 1985
– Framework Convention on Tobacco ControlFramework Convention on Tobacco Control
20032003

44. Product Safety LawsProduct Safety Laws
• Rationale for product safety lawsRationale for product safety laws
– Products are increasing in complexity andProducts are increasing in complexity and
sophistication; reasonable inspection will not revealsophistication; reasonable inspection will not reveal
latent defects or hazardslatent defects or hazards
– Minimum and uniform standards ensure developingMinimum and uniform standards ensure developing
countries do not become dumping grounds for sub-countries do not become dumping grounds for sub-
standard products rejected in the country of originstandard products rejected in the country of origin
– International standards will provide for unimpededInternational standards will provide for unimpeded
access to overseas marketsaccess to overseas markets

45. • Components (5) of a comprehensive productComponents (5) of a comprehensive product
safety policy:safety policy:
• 1. Preparatory action1. Preparatory action
– Surveillance of products in the marketSurveillance of products in the market
– Data collection (local and foreign sources)Data collection (local and foreign sources)
• ““Consolidated List of Products Whose Consumption and/orConsolidated List of Products Whose Consumption and/or
Sale Have Been Banned, Withdrawn, Severely Restricted, orSale Have Been Banned, Withdrawn, Severely Restricted, or
Not Approved by Governments”Not Approved by Governments”

46. • 2. Regulatory action2. Regulatory action
– Development of product safety standardsDevelopment of product safety standards
• 3. Monitoring action3. Monitoring action
– Testing by government or reliableTesting by government or reliable
independent consumer organizationsindependent consumer organizations

47. • 4. Corrective action4. Corrective action
– Impose product bansImpose product bans
– Warning noticesWarning notices
– Product recallsProduct recalls
– Seize stocksSeize stocks
– Destroy stocksDestroy stocks
– Require modifications of the productRequire modifications of the product

48. • 5. Compensatory actions5. Compensatory actions
– Compensate consumers for lossCompensate consumers for loss
– Deter future wrongdoingDeter future wrongdoing

49. Consumer CreditConsumer Credit
• Credit increases demand for andCredit increases demand for and
consumption of goods and servicesconsumption of goods and services
• Critical to economic growthCritical to economic growth
• Unfettered growth of credit has negativeUnfettered growth of credit has negative
consequencesconsequences
– Impulse buyingImpulse buying
– Extra costs associated with creditExtra costs associated with credit
– Excessive debtExcessive debt

50. • The poor pay moreThe poor pay more
– Ineligible for credit in many stores; thus buy shoddyIneligible for credit in many stores; thus buy shoddy
goods at higher pricesgoods at higher prices
– If credit advanced, higher rates chargedIf credit advanced, higher rates charged
• Credit often advanced to individuals with aCredit often advanced to individuals with a
history of defaulthistory of default
• Increased complexity of transactions (e.g. homeIncreased complexity of transactions (e.g. home
equity loans/lines of credit) require moreequity loans/lines of credit) require more
complex documentscomplex documents
– More difficult to understand and compare terms,More difficult to understand and compare terms,
including cost of creditincluding cost of credit

51. • Consumer credit laws shouldConsumer credit laws should
– Require lenders to provide consumers with copies ofRequire lenders to provide consumers with copies of
all documentsall documents
– Establish a single method of calculating interest ratesEstablish a single method of calculating interest rates
– Conspicuously disclose the rateConspicuously disclose the rate
– Control the price of creditControl the price of credit
– Regulate credit-related insuranceRegulate credit-related insurance
– Provide right to cancel (“cooling off” period)Provide right to cancel (“cooling off” period)

52. Electronic commerceElectronic commerce
• 1996 fewer than 40 million connected to internet1996 fewer than 40 million connected to internet
• 1997 number increased to 96 million1997 number increased to 96 million
• 2005 predicted to be nearly 1 billion2005 predicted to be nearly 1 billion
• 1998 27.6 million buying goods and services1998 27.6 million buying goods and services
online worth $32 milliononline worth $32 million
• 2002 more than 128 million spending over $4252002 more than 128 million spending over $425
millionmillion

53. • Issues:Issues:
– Consumer redress in cyberspace disputesConsumer redress in cyberspace disputes
– PrivacyPrivacy
– Identification of providerIdentification of provider
– Security of paymentsSecurity of payments
– FraudFraud

54. • Organization for Economic Cooperation andOrganization for Economic Cooperation and
Development (OECD)Development (OECD)
• United Nations Commission on InternationalUnited Nations Commission on International
Trade Law (UNCITRAL)Trade Law (UNCITRAL)
• Alliance for Global Business (AGB)Alliance for Global Business (AGB)
– International trade associationsInternational trade associations
• Global Business Dialog on Electronic CommerceGlobal Business Dialog on Electronic Commerce
(GBDe)(GBDe)
– CEO-led business initiativeCEO-led business initiative
• International Chamber of Commerce (ICC)International Chamber of Commerce (ICC)

55. Part III: Consumer Protection andPart III: Consumer Protection and
Basic NeedsBasic Needs
Consumer EducationConsumer Education
• Objectives of consumer education are:Objectives of consumer education are:
• Develop skills to make informed decisions in theDevelop skills to make informed decisions in the
purchase of goods and services in light ofpurchase of goods and services in light of
– Personal valuesPersonal values
– Maximum utilization of resourcesMaximum utilization of resources
– Available alternativesAvailable alternatives
– Ecological considerationsEcological considerations
– Changing economic conditionsChanging economic conditions

56. • Become knowledgeable about the law andBecome knowledgeable about the law and
consumer rights, in order to participateconsumer rights, in order to participate
effectively and confidently in the marketplaceeffectively and confidently in the marketplace
and take appropriate action to seek redressand take appropriate action to seek redress
• Develop an understanding of the citizen’s role inDevelop an understanding of the citizen’s role in
the economic, social and government systemsthe economic, social and government systems
and to influence those systems to make themand to influence those systems to make them
responsive to consumer needsresponsive to consumer needs

57. • Consumer education is not the same thingConsumer education is not the same thing
as consumer informationas consumer information
– Consumer education improves consumer’sConsumer education improves consumer’s
ability to use informationability to use information

58. • ““By exercising free choice, based on knowledgeBy exercising free choice, based on knowledge
of the facts, the consumer will be able to makeof the facts, the consumer will be able to make
the best use of his resources, money, time,the best use of his resources, money, time,
knowledge and ability. He will thereby contributeknowledge and ability. He will thereby contribute
to the proper functioning of the economy andto the proper functioning of the economy and
stimulating effective and fair competition and hestimulating effective and fair competition and he
will thereby contribute to social and economicwill thereby contribute to social and economic
development.”development.”
– Council of Europe (1981)Council of Europe (1981)

59. • Modern conception of consumer educationModern conception of consumer education
reflects the inter-relationship between the privatereflects the inter-relationship between the private
household and societal responsibilitieshousehold and societal responsibilities
• Concepts such as sustainable consumption areConcepts such as sustainable consumption are
woven into education about the impact ofwoven into education about the impact of
modern consumer lifestyles on the environmentmodern consumer lifestyles on the environment
• In developing countries, consumer education isIn developing countries, consumer education is
a tool to ensure that scarce resources of poorera tool to ensure that scarce resources of poorer
consumers are not fritted away by unethicalconsumers are not fritted away by unethical
business practicesbusiness practices

60. • Strategies for implementing consumerStrategies for implementing consumer
educationeducation
• A comprehensive program is directed toA comprehensive program is directed to
all consumersall consumers
– SchoolsSchools
• Skills to make informed decisionsSkills to make informed decisions
• Skills to understand the impact of decisions ofSkills to understand the impact of decisions of
individuals, businesses and governments on theindividuals, businesses and governments on the
lives of otherslives of others

61. – Those outside formal educationThose outside formal education
• Mass mediaMass media
• Trade associationsTrade associations
• Trade unionsTrade unions
• Resident associationsResident associations
– Special focus onSpecial focus on
• Rural areasRural areas
• Low incomeLow income
• Vulnerable groups (seniors; disabled)Vulnerable groups (seniors; disabled)

62. • Six fields of content suggested by theSix fields of content suggested by the
Nordic Council of Ministers (1999)Nordic Council of Ministers (1999)
– Personal financesPersonal finances
– Rights and obligationsRights and obligations
– Commercial persuasionCommercial persuasion
– Consumption, environment and ethicsConsumption, environment and ethics
– FoodFood
– SafetySafety

63. UtilitiesUtilities
• UUttiilliittiiees are considered basic needss are considered basic needs
• Universal Declaration of Human RightsUniversal Declaration of Human Rights
states that everyone has the right of equalstates that everyone has the right of equal
access to public services in his/heraccess to public services in his/her
countrycountry

64. • 1.6 billion do not have access to energy1.6 billion do not have access to energy
supplysupply
• Over 1 billion lack access to clean waterOver 1 billion lack access to clean water
• One half of the world’s population hasOne half of the world’s population has
made a phone callmade a phone call
• 5% of the world uses the internet5% of the world uses the internet
– 88% of those are in developed world (15% of88% of those are in developed world (15% of
world’s population)world’s population)

65. • Utilities present unique problems for consumersUtilities present unique problems for consumers
– Generally involve basic and essential servicesGenerally involve basic and essential services
– Peculiar economic characteristics that makePeculiar economic characteristics that make
competition difficultcompetition difficult
• Public policy has focused on regulatingPublic policy has focused on regulating
monopolies for public protectionmonopolies for public protection
– Price and other controlsPrice and other controls
– Public ownershipPublic ownership

66. • Support for privatization based onSupport for privatization based on
– Inefficiency of government ownershipInefficiency of government ownership
– CorruptionCorruption
– Failures in developing countries to provideFailures in developing countries to provide
adequate levels of serviceadequate levels of service

67. The special case of waterThe special case of water
• One reason for problems stemming from stateOne reason for problems stemming from state
ownership of water is that it’s too cheapownership of water is that it’s too cheap
• Prices are kept artificially lowPrices are kept artificially low
– On average, price covers 1/3 of costOn average, price covers 1/3 of cost
– Shortfall made up by government subsidiesShortfall made up by government subsidies
• ConsequencesConsequences
– Consumption is encouragedConsumption is encouraged
– No incentive to conserveNo incentive to conserve
– shortagesshortages
– Governments don’t have the money to invest inGovernments don’t have the money to invest in
infrastructure improvements or pay off debtsinfrastructure improvements or pay off debts

68. • Response of IMF and World Bank isResponse of IMF and World Bank is
privatizationprivatization
– Introduce market disciplineIntroduce market discipline
– Give access to financial capital necessary forGive access to financial capital necessary for
infrastructure expansioninfrastructure expansion
• Built into loan conditionality agreements orBuilt into loan conditionality agreements or
structural adjustment programsstructural adjustment programs

69. • Privatization is controversialPrivatization is controversial
– Results in increased cost to consumersResults in increased cost to consumers
– Some consumers may not be able to afford itSome consumers may not be able to afford it
• Governments must raise prices to make sale possible; profitGovernments must raise prices to make sale possible; profit
of buyers factored inof buyers factored in
– Potential abuses of monopoly powerPotential abuses of monopoly power
– Improvements to infrastructure and potentialImprovements to infrastructure and potential
extension of service to additional consumers may beextension of service to additional consumers may be
offset by refusal to extend to non-profitable areasoffset by refusal to extend to non-profitable areas

70. – Buyers tend to be western multi-nationalsBuyers tend to be western multi-nationals
• Loss of economic independenceLoss of economic independence
• Foreign owners dictating termsForeign owners dictating terms
• Concentration of developing world resources inConcentration of developing world resources in
western ownershipwestern ownership

71. • Privatized systems must include:Privatized systems must include:
– Guaranteed universal accessGuaranteed universal access
– Fair pricing structureFair pricing structure
– Uniform quality standardsUniform quality standards
– Protection from termination of serviceProtection from termination of service

72. Food: Security and SafetyFood: Security and Safety
• International law recognizes the right to foodInternational law recognizes the right to food
– Physical and economic access to foodPhysical and economic access to food
– Access to food of adequate quality and quantityAccess to food of adequate quality and quantity
– Having the means to obtain itHaving the means to obtain it
• By way of production or procurementBy way of production or procurement
• Food security defined by FAO as food that isFood security defined by FAO as food that is
“safe, nutritious and culturally acceptable and is“safe, nutritious and culturally acceptable and is
available, accessible and affordable to allavailable, accessible and affordable to all
people”people”

73. • Over 800 million people suffer fromOver 800 million people suffer from
hunger and food insecurityhunger and food insecurity
– 99% are in the developing world99% are in the developing world
• 21% of population of India21% of population of India
• 11% of population of China11% of population of China
• 58% of population of Central Africa58% of population of Central Africa

74. • 1996 World Food Summit, 185 countries and the1996 World Food Summit, 185 countries and the
EC made a commitment to achieve universalEC made a commitment to achieve universal
food security.food security.
• Pledged to reduce number of hungry people inPledged to reduce number of hungry people in
world to half (to 400 million) by 2015world to half (to 400 million) by 2015
• According to FAO, number of undernourishedAccording to FAO, number of undernourished
falling at rate of 8 million per year (target of 20)falling at rate of 8 million per year (target of 20)
• Thus goal won’t be reached until 2030Thus goal won’t be reached until 2030

75. Hunger FactsHunger Facts
• There is enough food to feed all theThere is enough food to feed all the
people in the worldpeople in the world
– 4.5 pounds per person per day4.5 pounds per person per day
• Real causes of hunger are poverty,Real causes of hunger are poverty,
inequality and lack of accessinequality and lack of access

76. • Rapid increase in food production doesn’tRapid increase in food production doesn’t
necessarily result in food securitynecessarily result in food security
– 78% of countries reporting child78% of countries reporting child
malnourishment export food!malnourishment export food!
• India had 42 million ton grain surplus in 2000India had 42 million ton grain surplus in 2000
• 5,000 Indian children die each day of malnutrition5,000 Indian children die each day of malnutrition

77. • Prosperity of a country no guarantee thatProsperity of a country no guarantee that
citizens won’t go hungrycitizens won’t go hungry
– US has highest GDP in worldUS has highest GDP in world
– 4.2 million households (4.1%) experience4.2 million households (4.1%) experience
hunger at least part of the yearhunger at least part of the year

78. Role of food importsRole of food imports
• Removal of import restrictions and lower foodRemoval of import restrictions and lower food
tariffs make importation of highly subsidized foodtariffs make importation of highly subsidized food
an attractive alternativean attractive alternative
• Potential problems:Potential problems:
– Vulnerability to price and supply fluctuations andVulnerability to price and supply fluctuations and
political upheavalpolitical upheaval
– Subject to manipulation by transnational corporationsSubject to manipulation by transnational corporations
– Undermine livelihood of farmersUndermine livelihood of farmers

79. • Consumer groups should focus government attention on:Consumer groups should focus government attention on:
• Promoting food security and improved access to foodPromoting food security and improved access to food
• Reconciling demand for cheap food with adequateReconciling demand for cheap food with adequate
compensation to farmerscompensation to farmers
– Often involves scrutiny of middlemenOften involves scrutiny of middlemen
• Address underlying causes of povertyAddress underlying causes of poverty
• Give priority to production of staple foods for domesticGive priority to production of staple foods for domestic
consumptionconsumption
• Address issues that contribute to food securityAddress issues that contribute to food security
– UrbanizationUrbanization
– Land degradationLand degradation
– Water scarcityWater scarcity

80. Food safetyFood safety
• Food safety risks are increasingFood safety risks are increasing
– Movement of food and live animals across bordersMovement of food and live animals across borders
– Changes in food handlingChanges in food handling
– Emergence of new pathogensEmergence of new pathogens
• Risks greater in developing countriesRisks greater in developing countries
• Pesticide risksPesticide risks
– Direct risk through application processDirect risk through application process
– Indirect risk through toxic residues in foodIndirect risk through toxic residues in food
• Hormones, veterinary drugs and antibiotics inHormones, veterinary drugs and antibiotics in
animalsanimals

81. • Building food safety capacity is essential,Building food safety capacity is essential,
especially in developing countriesespecially in developing countries
– Food borne disease has significant impact onFood borne disease has significant impact on
both health and developmentboth health and development
• Many developing countries lack theMany developing countries lack the
resources and expertise to implement foodresources and expertise to implement food
safety policiessafety policies

82. Codex AlimentariusCodex Alimentarius
CommissionCommission
• Established by FAO and WHO in 1962Established by FAO and WHO in 1962
• Harmonize food standards betweenHarmonize food standards between
countriescountries
• Protect health of consumers and ensureProtect health of consumers and ensure
fair practices in food tradefair practices in food trade
• Membership of 165 countries representingMembership of 165 countries representing
98% of world population98% of world population

83. • Codex committeesCodex committees
– Meat and poultry hygieneMeat and poultry hygiene
– Food additives and contaminantsFood additives and contaminants
– Pesticide residuesPesticide residues
– Residues of veterinary drugs in foodsResidues of veterinary drugs in foods
– Food hygieneFood hygiene
– Animal feedingAnimal feeding
– BiotechnologyBiotechnology

84. Consumer concerns with geneticConsumer concerns with genetic
engineeringengineering
• Concerns about GE relate toConcerns about GE relate to
– Sustainability of biodiversitySustainability of biodiversity
– Ecological balance of life support systemsEcological balance of life support systems
– WildlifeWildlife
– EnvironmentEnvironment
– Health problemsHealth problems
• Groups have called for moratorium on plantingGroups have called for moratorium on planting
GE crops until safety concerns are addressedGE crops until safety concerns are addressed
and appropriate controls put in placeand appropriate controls put in place

85. • Appropriate controls includeAppropriate controls include
– Labeling of GE importsLabeling of GE imports
– Banning of unlabeled GE foodsBanning of unlabeled GE foods
• Some countries already have labelingSome countries already have labeling
laws in placelaws in place

86. Sustainable ConsumptionSustainable Consumption
The concept of sustainable consumptionThe concept of sustainable consumption
• Ever-increasing consumption is putting aEver-increasing consumption is putting a
strain the environmentstrain the environment
• Outcome of the development model theOutcome of the development model the
North follows and the South emulatesNorth follows and the South emulates
• Sustainable consumption is viewed as theSustainable consumption is viewed as the
only long-term strategy for survivalonly long-term strategy for survival

87. • Many definitions of sustainable consumptionMany definitions of sustainable consumption
• All share these basic principles:All share these basic principles:
– Satisfaction of basic needs to improve quality of lifeSatisfaction of basic needs to improve quality of life
– Improving efficiency in resource useImproving efficiency in resource use
– Minimizing emissions of wastes taking intoMinimizing emissions of wastes taking into
consideration the capacity of the earth to assimilateconsideration the capacity of the earth to assimilate
the wastesthe wastes
– Adopting consumption patterns that will not jeopardizeAdopting consumption patterns that will not jeopardize
the needs of current and future generationsthe needs of current and future generations
– Ensuring equity in consumption within countries andEnsuring equity in consumption within countries and
between countriesbetween countries

88. ObstaclesObstacles
• IgnoranceIgnorance
– We don’t know level of per capita consumption theWe don’t know level of per capita consumption the
planet can sustainplanet can sustain
• InequalityInequality
– Differences within and between nations makeDifferences within and between nations make
developing a common agenda difficultdeveloping a common agenda difficult
• InstitutionsInstitutions
– Existing political and economic mechanisms forExisting political and economic mechanisms for
addressing major international problems of theaddressing major international problems of the
environment are inadequateenvironment are inadequate

89. SuccessesSuccesses
• Growth in use of material resources hasGrowth in use of material resources has
slowed as a result of shifts in demandslowed as a result of shifts in demand
towards less material-intensive productstowards less material-intensive products
• Emissions have been reduced as a resultEmissions have been reduced as a result
of tighter regulations and incentivesof tighter regulations and incentives
• Municipal waste growth has slowed orMunicipal waste growth has slowed or
declineddeclined

90. Obligations of governmentObligations of government
• UN Guidelines on Consumer Protection:UN Guidelines on Consumer Protection:
• Minimize resource utilizationMinimize resource utilization
– E.g., greater efficiency in use of energyE.g., greater efficiency in use of energy
• Exercise leadershipExercise leadership
– Adopt and enforce regulationsAdopt and enforce regulations
• Reinforce valuesReinforce values
– Consumer education programs for consumersConsumer education programs for consumers
on impacts of their choices and behavioron impacts of their choices and behavior

91. Obligations of the corporate sectorObligations of the corporate sector
• World Business Council for SustainableWorld Business Council for Sustainable
Development in 2001 proposed a seven-pointDevelopment in 2001 proposed a seven-point
blueprint for corporations; include:blueprint for corporations; include:
– Develop technological and social innovations toDevelop technological and social innovations to
improve quality of life and tackle depletion ofimprove quality of life and tackle depletion of
resourcesresources
– Use media and advertising to promote sustainabilityUse media and advertising to promote sustainability
– Create markets that reflect real economic, social andCreate markets that reflect real economic, social and
environmental costsenvironmental costs
– Create opportunities for the poorest segments ofCreate opportunities for the poorest segments of
societysociety

92. Obligations of consumersObligations of consumers
• CI urges consumer organizations to:CI urges consumer organizations to:
– Educate members on sustainable consumption inEducate members on sustainable consumption in
order to change attitudes and behaviororder to change attitudes and behavior
– Provide information to consumers on products andProvide information to consumers on products and
services and demand that same be provided byservices and demand that same be provided by
merchantsmerchants
– Regularly assess environmental aspects of productsRegularly assess environmental aspects of products
– Represent the environmental interests of consumersRepresent the environmental interests of consumers
at all relevant national and international forumsat all relevant national and international forums

93. • Consumers are encouraged to avoid productsConsumers are encouraged to avoid products
thatthat
– Cause environmental degradation during theCause environmental degradation during the
extraction of natural resources or during theirextraction of natural resources or during their
manufacture, use and disposalmanufacture, use and disposal
– Utilize large amounts of energy during theirUtilize large amounts of energy during their
manufacture, use or disposalmanufacture, use or disposal
– Cause unnecessary waste, due to over-packaging orCause unnecessary waste, due to over-packaging or
unduly short life spanunduly short life span
– Utilize materials derived from threatened species orUtilize materials derived from threatened species or
environmentsenvironments
– Adversely affect other countries and communities,Adversely affect other countries and communities,
especially those in the Southespecially those in the South

94. • ““Consumers may be willing to take easy stepsConsumers may be willing to take easy steps
that benefit the environment; but may not makethat benefit the environment; but may not make
significant changes in buying habits, paysignificant changes in buying habits, pay
markedly higher costs, or make changes in basicmarkedly higher costs, or make changes in basic
lifestyles. Yet sustainable consumption calls forlifestyles. Yet sustainable consumption calls for
such effective approaches. Consumersuch effective approaches. Consumer
conscience has to be sufficiently modified suchconscience has to be sufficiently modified such
as to effect changes in behavior. This is theas to effect changes in behavior. This is the
ultimate challenge for the consumer movement.ultimate challenge for the consumer movement.
Consumers have to be convinced that when theyConsumers have to be convinced that when they
vote with their pockets they are in fact exercisingvote with their pockets they are in fact exercising
a social, moral and political responsibility thata social, moral and political responsibility that
goes beyond their own parochial interests andgoes beyond their own parochial interests and
their present generation.”their present generation.”