Jisuke NAGAO
*Summing-up speech in Public Form of JASCA
Some Remarks on “Harmonization"*
Jisuke NAGAO**
** Professer of Civil Law, Faculty of Law, Ritsumeikan University
Translated by Shuei HIRATSUKA***
*** Japan Desk, Regional Office for Asia and the Pacific of International Organization of Consumers Unions
A common theme in the presentation is that the voice of citizens and consumers should be heard in developing policy and administrative guidance, in terms of economy as said by Ms Aline Archimbaud, former European Parliament Member, in terms of justice as said by Mr Kohei Nakabo, former president of the National Federation of Bar Associations, and in terms of legislation and administration as said by Professor Akira Negishi, Kobe Unversity and Professor Sothi Rachagan, University of Malaya. In other words, their ideas are based on the principle of democracy: “citizens and consumers have a right to express their interests".
From this common viewpoint, we discussed what consumer protection should be harmonized in a changing world and how it should be done (1). Today's discussion can be summerized: first, the exchange of information on national and regional economic situations and consumer protection; second, the necessity of harmonization of consumer rights and interests; third, the presentation of measures to promote harmonization.
(1) We will not define the words “consumer protection" in a narrow sense as the relationship between peoples and their economic activities, but in the broad sense as relationship between peoples lives and their external environment including their economic livelihood.
1. Necessity for harmonization1.1 Improvement of consumer protection policy
Consumer protection policy and it's administration are divided in two: State and non-state. In the former case, especially in the period when the international economy has not been large, consumer policy is chracterised as State intervention in national economic activity. In this case, it has been sufficient that we were discussing the economic situation and policy in a single country or in a single region, because the nature of intervention depends on cultural and political contexts in each country, and it would be impossible to expect that the State intervention would be done in the same way with the same contents.
On the other hands, in a new period when the market economy is internationally developed and not only commodities and financial investment but also people are moving easily across national boundaries, policy maker have a tendency to recognize that a regulation which is different to other countries regulation will be trade barrier, and consumers recognize also that they want to get the same protection as other country's consumers even though they are in other region.
In this context, the harmonization of consumer protection is globally necessary. We need to consider whether State intervention into market and consumer protection should be kept as it has been previously, or, whether it sould be improved taking into consideration the global change in social, economic and political arenas.
1.2 Harmonizaiton of State mechanism for consumer protection
Consumer protection, as far as the interests are just and right, is an universal idea because each person has to be esteemed as s component of human society. In other words, it's also a juridical idea based on fundamental human rithts which are not related to the State's policy on economy.
In this context, it is very natural that consumers are moving towards international solidarity in protection for the follwing reasons:
(1) The economy should have the responsibility not to violate the consumer's rights.
(2) The State's economic policy should also contain an ethical code on consumer protection.
(3) The behaviour of the private business sector should be allowed only if it will be in conformity with the ethical code of conduct.
First, the State's economic policy has therefore an aim to guarantee the consumers rights through legislation in order to maintain the equal partnership between consumers and business entities. We can call this legislation “a horizontal regulation" in terms of the settlement of criteria to resolve the conflicts among interested parties. The State's intervention brings together voluntary action by interested parties. It's efficiency depends on whether each party, especially consumers, can use the right to redress.
Socond, consumer protection will only be realized through imposing an obligation on the business entity. This is a direct regulation of business by the State. We can call this intervention “a vertical regulation". One can think that it will be achieved by an administrative measure by the government which is executing the regulation.
Therefore we can discuss the Harmonization of State mechanism in terms of a horizontal and vertical regulation of the justice.
2. Consumer protection law in each country2.1 Developed and developing countries in consumer protection
We can consider that consumer protection legislation is different in each country according to how the State and the people understand consumer protection. And whether they have an international mechanism or not is also a very important feature to think about in harmonization of consumer protection law.
(a) EU
Consumer protection is recongnized as a practical target and a stable policy in the action plan such as article 36 in Treaty of Rome (1957) and article 129 A in Maastricht Treaty (1992). The harmonization of the law has been covered in Articles 100 and 235 in Treaty of Rome. The EU has promoted harmonization(2) in a both a horizontal and vertical form. Action has been based on EC Directives on liability for defective products, safety of toys, consumer credit regulation, misleading advertising, contract negotiated away form business premises - “doorstep selling", unfair contract terms, general product safety, onsumers right for legal access, etc.
Second, from the point of view of the effectiveness of the above regulation, collection and dissemination of consumer information are the obligation of member States and they create a monitoring system of regulation.
Thirdly, the EU takes supplementary measurements concerning product safety.
It seems that EU legislation has been reflected through American ideas of human rights, acts through judicial precedents, and acts of Parliaments where consumer rithts are hermeneutically born.
(b) Australia and ASEAN countries
In ASEAN countries, whicch belong to the Common Law System they are trying to harmonize with ones in UK and in USA. Recently, their laws have a model in EC Directives like the introduction of product liability in the case of reform of the Commercial Act Law in Australia.
(c) Other remarks
Without international harmonization, and worse still with lack of recongnition of “consumer rithts" based on human rights, some countries established consumer protection which assume that consumers should be protected by States. Consumer protection is therefore indirect. Governmental administration wants to control business entities. Cases in Malaysia and Japan as well as cases in Thailand and Singapore where consumer protection law set up in 1970's show this well. Even today, these countries do not have yet the legal access in lawsuits, where consumers and corporations are standing as equals. In this sense, we can differentiate the developed countries from developing countries in terms of consumer protection legislation. But in Philippines, they are now an integrated code for consumer protection, including private law, and this will influence other Asian countries legislation.
(2) Ms Aline Archimbaud pointed out that dominant force sustained by citizens should be needed for the access to EC directives. According to her, the harmonization in the EU has been made progress only in terms of free merket.
2.2 Legal limit and legal reform
How about the current judicial situation? The legal method is a civil law, through which consumers can apply to sue corporations. That means are not flexible beccause there is no special legal procedure that will apply to the resolution both for public conflicts and consumer conflicts. Therefore there is a limit to create a norm through law suits so that consumers who need legal reform have access.
3. Problems for Harmonization3.1 Deregulation and consumer protection
(a) Deregulation and consumer protection
Recently, structual adjustment works toward market economy have been done globally. In some States where people criticizad the government for the failure of market economy, they have called for deregulation of government measure, aiming market transparency. People recongnized that corporations have the primary responsibility for social order. As a result, the rationalization of the economic phenomena related to the distribution and sales of commodities which are familiar to consumers is advanced. The protective, easure for domestic industries have declined; the participation to the market by new enterpreneurs have been encouraged; and the price diference between home products and imports was reduced.
This trends of deregulation shall be applied to consumer interests. Consumers who were forced to buy imported consumer goods at the high price under the economic regulation can now purchase the imported goods at a lower price and consumers can enjoy the same economic benefits across national boundaries. This will be a harmonization of consumer interests.
We have a task to change the economic policy of the State toward the consumer interests and to encourage the global harmonization of consumer protection. So we need the reinforcement of the Antimonopoly Act and promotion of global harmonization of consumer in terests.
(b) Relationship between deregulation and consumer interests
(i) Economic regulation and social regulation
In case of issues such as safety of life and health, advocates for economic derefulation recognize social regulation as an obstacle. On the contrary, advocates for safety will ask for social regulation even in the economic deregulation.
Economic deregulation means the enlargement of free trade zone where the scope for business activities depends on the creative spirits of enterpreneurs, the rapid management of business activities as opposed to delays which occurred under complicated regulation, the removal of the price controls obstacle. At the same time, economic deregulation carries the risk that business does not judge the safety of products and services and the cost covering the safety of products and services are transfered to the consumers.
From the point of view of safety as a priority for purchasers of the commodity, the information on quality and conformity with safety standards should be given to consumers by the producers. And one must be cautious that the risks inherent in imported goods are not covered by the domestic standards for the information dissemination. Furthermore the producers should do their best to reduce the costs of the safety: the maxumum safety with the minimum cost.
(ii) Harmonization in higher standards
Consumer interests should not be undermined by the economic benefit even under the liberalization of the business activities through deregulation. Taking an example, under the EC Directive on Genral Product Safety in 1992, there is an obligation not to introduce unsafe products. This means the safety standards are included in it's technical level and because of this obligation, unsafe products can not enter in the chaine of destribution in the beginning. Product liability for defective products provides a recompensation for consumers, while product safety is a prevention for damege caused by defective products.
The harmonization of consumer protection policy and legislation should be implemented through applying the highest standards from the comsumers view point.
4. Civil society and consumer protection Even in Japan, in developing countries, the followings are the problems to be resolved in terms of “Harmonization of consumer protection":
(a) Existence of hope for civil society where States and the people guarantee consumer interets
(b) Existence of the same hope in the international community and/or international organizations
(c) Enthusiastic work to harmonize the domestic code with other countries codes at a high level
(d) Consumer right to speak out for their sovereignity, to take the responsibility and to sweep out the violation vis a vis producers under easy and inexpensive procedures
(e) Existence of freedom of association for consumers to represent their interests to producers, local and national governments in order to prevent the damage or fraud.
But generally speaking, the above duty does not clearly appear in the developing countries for consumer protuection legislation, because of the State's tendency to put economic development before cconsumer protecction. And a tendency of top-down administrative control. Finally there are so many economic regulations and no appropriate measurements to protect consumers.
(a) In this field, experts in dveloping countries shall sincerely think about how domestic consumer protection legislation approaches the level of developed countries. The EU is example in promoting harmonization, expecially in “horizontal regulation".
(b) They shall think about information disclosure by producers and it's legal basis and systems to execute consumer rights, and to ensure product safety during deregulation, and to judge appropriately.
(c) They shall think about the integreted government organ for consumer affairs from the harmonization view point, while in the majority of countries, the consumer affairs administration has been done separately and partially in several departments in several ministries.
(d) They shall think about legal reform because the court is a symbolic place between legislative spirit for consumer protection and concrete conflicts for consumer interests. There is a difference between developed and developing countries in legal reform too. They need an increase in the number for lawyers, judge and prosecutors who can work for consumer protection.
5. Promotion of Harmonization5.1 Proposal of
We need a tool to promote harmonization.
(a) The precondition shall be people's recognition in every day life of consumer rights and their importance.
(b) It will be very important to gather together an independent as sociation of consumer organizations to promote consumer rights. We will call this association as “Non-goverment Council for Consumer Protection ( for short)" as an alternative of “Consumer Protection Board" which is defined by Article 18 of the Consumer Protection Law" in Japan.
(c) To promote harmonization, a significant shall be played by lawyers who know about the current situation of existing laws and foreign countries' consumer protection legislation through specific lawsuit cases.
(3) Ms Aline Archimbaud “Citizens as sovereignity in the economy"
5.2 Action plan of
(a) As first stage, we can refer to the resolution at 32nd conference on human rights organized by National Federation of Bar Association in 1989. They proposed a unified governmental organ for consumer affairs. The can promote this idea.
(b) As second stage, we can give body and substance to this idea based on consumer protection legislation in developed countries with reference to the United Nations Consumer Protection Guidelines. The can take a step toward national lobbying activities for law in relation to UN Guideline. In order to that, the may provide the theoretical base of the comparative study of existing law nationally and internationally.
(c) The work of the shall be synchronized by the solidarity with other countries' voluntary , by the (3) of all level of citizens, and by the partnership of international and local consumer groups.
(d) As third stage, their output should be brought into the policy of State and international organizations.
The above is especially important in developing countries where people rely on government policy. The mutual dialogue between government and citizens and it's transparancy to the public will be conformed with a spirit of democracy as people's control of State.
We are hoping that the above discussion will take place in every country. Because the deregulation and/or structual adjustment of “social regulation" are an imminent duty due to the possibility of social tension.
5.3 Direction of our Seminar
We also hope that the debate does not concern only the “hardware" side such as legislation, systems for legal access, and legal reform but also the “software" side such as a judicial awareness and conscience, and legal theory. We shall keep maintaining the harmonization level for consumer protection amongst the developed countries(4).
To engage in the above hectic tasks as their own responsibility is the works of jurists whose social duty and public interests have being always asked.
(4) Mr Allan Asher stressed the difference between (a) there is a law and (b) the law is effectively execcuted and (c) people are in a position to use the rights based on the law. These above factors will be related to the “software" of the law.
6. Another 4 workshops Finnaly we must announce that JASCA Public Forum for “Deregulation and it's impact on consumer protection" will be followed by 4 JASCA workshops on “Fair trade and anti-monopoly policy", on “Saving's and investment", Product liability and product safety,and on “Consumer credit and financial services". These workshops will be very helpful in thinking what and how should be our path toward grobal harmonization of consumer protection across national boundries.
We wish all of you to attend our productive workshops starting tomorrow. Thank you for your attention.
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