CONSUMER MATTERS: CONSUMER PROTECTION IN THE GLOBAL MARKET
ISO Bulletin 3/2003 Now called ISO Focus
At its meeting in Tunis in May 1998, COPOLCO adopted a resolution establishing a working group on consumer protection in the global marketplace. The impetus for its establishment came largely from two sources. First, there was an emerging market whereby consumers were buying goods via the Internet and secondly, due to the increased globalisation affecting consumer markets for goods and services in both the on-line and off-line contexts.
As a result and taking into account the complexity and costs of taking action in a foreign jurisdiction, traditional forms of consumer protection established by national and provincial governments were felt to be largely impractical for global purchasers. The role of the working group, therefore, was to develop policy proposals for consideration by COPOLCO and ultimately for ISO.
Briefly discussed here are three areas that have received significant attention from the working group:
- Corporate social responsibility;
- Codes of conduct and
- Complaints handling.
One of the important outcomes from the working group s deliberations has been the development of an International Standard on Complaints handled (future ISO 10018) within ISO/TC 176/SC 3/WG 10. The draft document has been approved to go out as an International Standards (DIS) draft from February 2003 for a five month commentary period. It is anticipated that the standard will be published in mid-2004. As the draft standard states, implementation of the processes contained within it can:
- Provide a complainant with access to an open and responsive complaint-handling system;
- Enhance the ability of an organisation to resolve complaints in a consistent and systematic manner, to the mutual satisfaction of both complainant and organisation;
- Enhance the ability of an organisation to develop and to identify trends and eliminate root causes of complaints. By these means, it would improve organisational operational functioning;
- Help create a customer-focused approach to resolving complaints, thereby encouraging personnel to improve their customer service; and
- Provide a basis for continual review, analysis and improvement of the complaint handling process.
As a result of the working group's activities, several new work items have been approved by the ISO. These initiatives are a logical continuation of the draft standard on complaints handling and specifically consider:
- External customer resolution systems and
- Dispute/complaints prevention by means of codes of conduct.
Both of these proposals are important in terms of redress mechanisms for consumer transactions carried out over the internet. However, with regard to the latter, codes of conduct are seen as a means of complaints/dispute prevention in that they can contain rules that, if followed, provide a minimum level of product and service quality.
Internationally recognised minimum criteria for codes of conduct
The primary rationale for proposing some internationally recognised minimum criteria for codes is linked to the global need for affordable and accessible redress mechanisms for consumers. That said, however, ISO standards in this area could also provide some benchmarks for locally based systems.
Increasingly, merchants (and others) are developing codes of conduct and making claims about those codes of conduct to consumers. To date, however, there has been no internationally agreed upon set of criteria for the development, content and use of codes. The result has been that both merchants and consumers alike have difficulty knowing which code claims are credible and verifiable, and which are not.
The working group considered it important to develop a set of essential criteria for effective codes, based on criteria established by a reputable and well recognised international body such as the ISO, in order to give consumers the confidence to deal with traders who comply with a code. At the same time, it has also sought to offer guidance to merchants about how to develop effective and credible codes of conduct.
Such a standard and when developed, would set criteria for codes of individual firms, as well as those at the sectoral level. In other words, codes of conduct would pertain to single activities or to a wide range of activities. In both cases the aim would be the creation of internationally recognised objective criteria, not only to ensure the credibility of codes, but also to ensure their delivery of real outcomes in the marketplace.
The working group has been supported in their activities in this regard by recent dissatisfaction expressed by both domestic and regional governments. Dissatisfaction with the current situation and a desire for a corrective solution to the problem has also been articulated by organizations that operate codes and specifically with regard to international deficiencies in the processes of code development and implementation.
Enhancing fair trading in the marketplace
The working group's objective of proposing an International Standard on codes of conduct would, therefore, aim to enhance fair trading in the marketplace. At the same time, it would also seek to establish procedures for code development and implementation to ensure that claims about codes could be both verified and substantiated. It should be emphasized at this point, however, that any proposed standard would not in any way prescribe what should be the content of codes. This is for individual organisations to decide.
The proposal for external customer dispute resolution systems is important because it will set some internationally recognised minimum criteria for industry-based dispute resolution schemes which are becoming popular in a number of countries, offering affordable and accessible redress schemes for consumers. These criteria, if applied, should lead to an effective form of dispute resolution.
The final issue of central activity to the working group has been in the area of corporate social responsibility. This has resulted in the proposal for a high-level advisory group to examine the feasibility of a standard on the issue. This has occurred against a backdrop of not only a great deal of consumer and business interest in the topic, but also with national standards on the topic.
These were already developed by Israel, Spain and current development in Australia. The working group prepared a draft report on the desirability and feasibility of ISO Corporate Responsibility standards for consideration by COPOLCO at its June 2002 annual meeting in Trinidad. In Trinidad, COPOLCO agreed to recommend to ISO that an Advisory Group be established and made up of relevant interested parties.
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About the author
Bill Dee, Chair of the COPOLCO working group on consumer protection in the global marketplace and Chair of the ISO/TC 176/SC 3/WG 10.