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La voix des La voix Consommateurs des àConsommateurs travers le monde à travers le monde TheThe global global voice voice La voz globalLa para vozlaglobal defensa para la for consumers for consumers de los consumidores defensa de los consumidores Harnessing business & consumer interests; is statute the only way? Robin Simpson Consumers International Fair Trading Commission of Barbados February 8 2008 What is CI? • Global federation of consumer organisations • 220 member organisations (mostly independent, some governmental)in 115 countries • Offices in London, Santiago, Kuala Lumpur • Working with UN on consumer protection guidelines Is statute the only way? • No The usual suspects (1) • • • • • • General consumer protection: Conduct – unconscionable, misleading, unfair Contract terms – implied terms and warranties Product safety Information disclosure Redress and penalties inc. product liability Usual suspects (2) • Competition • Sector specific legislation; (rather less usual) Consumer rights - CI • • • • • • • • Satisfaction of basic needs Safety Information Choice Representation Redress Consumer education Healthy environment UN-legitimate needs • • • • • • • b) promotion…. of economic interests a) protection from hazards to health/ safety c) information for choice f) freedom to form CAs & represent views e) redress d) consumer education g) sustainable consumption Self regulation - UN • Art 1 high levels of ethical conduct • Art 16 laws & standards, CA monitoring • Art 26 codes of marketing ..voluntary agreements..adequate publicity • Art 32 Governments: redress..formal & informal..fair, expeditious,inexpensive, accessible • Art 33:enterprises..resolve disputes (ditto) • Art 34 information on above Is SR for special markets? • • • • • • ‘Dysfunctional markets’ (EC and OECD) Eg: funeral services – funeral ombudsman legal services – legal services ombudsmen Natural monopolies – state regulators No need to deviate from basic CP Definitions of self regulation (1) • • • • • • Delegated Voluntary Hybrid No pure model Delegated may be too rigid Voluntary may be too loose Definitions of self regulation (2) • • • • • • • Unilateral codes of conduct Customer charters Unilateral sector codes Negotiated/approved codes Recognised codes Official codes/guidance Legal codes Code approval criteria • • • • • • • • Sponsoring body Beyond legal minimum Significant coverage Involvement of independents Complaints mechanisms + low cost redress Disciplinary sanctions Publicity Monitoring and reporting inc. annual review + report Strengths of SR • • • • • • • Flexibility Promotion of good practice (pos. not neg.) Industry identification with code Culturally flexible Burden of proof/ Cheap/rapid redress? Cost borne by industry Weaknesses of SR • • • • • • • • Dilemma: Limited coverage or Barriers to entry Non members may undercut standards Requirements may be ignored – just PR Multiplicity confuses consumers Sanctions may be weak or monitoring poor Consumer scepticism Conflict of interest for SRO May deter legislation Strengths of legislation • • • • • Governmental authority Obligatory compliance Comprehensive coverage Content not vetoed by industry Consumer credibility Weaknesses of legislation • • • • • • • Legislative time squeezed Negative rather than positive – ‘shalt not’ General legislation vague Precise legislation complex Criminal law unwieldy Built in obsolescence Unintended consequences Evolutionary theory • Self-regulation:stakeholders (predominantly industry) take the initiative to set standards for the benefit of consumers. The government or regulator need not have formal involvement. • Co-regulation:businesses and consumer stakeholders negotiate consumer rights and business obligations with each other under the auspices of public authorities with legal effect • Industry-led regulation Recent industry led regulation • US - children’s food and drink advertising: one jump ahead of legislation • UK Advertising Standards Authority • EU –cross-border selling, eg timeshare, • OECD – financial services • Even Russia? Role for CAs • • • • • Denmark: negotiating codes Belgium: standard contracts NL: public utility contracts UK regulated sector guaranteed standards EU wide: CA participation in alternative dispute resolution (ADR) ADR • • • • Arbitration and its critics Mediation and its critics French credit commissions Statutory ombudsmen: public and private sectors, national and local • European downgrade of adversarial principle Limits of ADR • • • • • • Civil rights or constitutional precedent One party has no legal competence Substantial power imbalance Legal issue to be decided Injunction needed Tactical move – bad faith Check list • • • • • • • • Public confidence, public reporting, publicity Autonomy, external presence, Standards and performance indicators Clear complaints procedures Monitoring of compliance Independent resolution of disputes Adequate resources Flexible evolution Thank you • [email protected] • [email protected]