At the outset, the Council wishes to express its support for the UNGCP as it serves a useful purpose as high level principles for our consumer protection advocacy work in Hong Kong. The UNGCP rightly does not specify precise measures to be implemented in a jurisdiction, as each has its own particular resource constraints, and the needs for consumers vary between different jurisdictions. Hong Kong's economy, and the need for protection of its consumers, varies to that of other countries that have different economic conditions and socio-political circumstances. As such, the Council's comments reflect to some degree the particular issues that arise in its jurisdiction and similar advanced economies.
The Council generally supports the raft of recommendations put forward by Consumers International (CI) but for its part it would also like to raise five areas in the current UNGCP that the Council believes should receive some special attention. These are as follows:
1. Protection of Financial Services
The Council agrees with the approach taken by CI in its recent submission on the review of the UNGCP. In particular, the Council emphasises the need to create a specific guideline on deposit protection to protect consumer's economic interests and prevent systemic collapse due to the disruption that arises, both locally and internationally, through failure of financial institutions to honour commitments. Guidelines on a redress system for consumer financial disputes should also be included in the UNGCP.
In addition, the Council suggests that some consideration be given to identifying the emergence and strong growth in some jurisdictions of various types of 'stored value' cards/facilities, that act as a source of funding for either closed (such as transit cards) or open (broad retail option) payment systems. The legal basis upon which consumer rights are protected in relation to these forms of consumer funds is often uncertain. Governments therefore need encouragement, or direct pressure to ensure that the issuers of the cards have the same legal obligations and responsibilities of other regulated financial institutions.
2. Electronic commerce
The Council agrees on the need to establish and enforce international standards, including neutral networks, and enhance international cooperation in relation to electronic commerce. While a lot of effort has been made in the past, for example, the UNCITRAL Model Law on Electronic Signatures (2001), the Council understands that much of the effort driving those initiatives stems from commercial, i.e. business to business concerns. Accordingly, it is appropriate for the UNGCP to specifically address principles relating directly to consumer online transactions, notwithstanding the fact that some issues might already be covered in other documentations.
A set of basic common rules governing certain duties of the parties involved in the authentication and signature process, and contractual obligations, which may have an impact on individual liability, therefore need to be specifically identified in the UNGCP. In addition, while solutions to consumer redress might exist in separate jurisdiction's legislative frameworks, online transactions are increasingly becoming a global issue. The issue of identifying the corporate or personal status of online traders, locating assets, and applying sanctions in the process of seeking consumer redress, needs to be addressed in the UNGCP.
While the practical solutions to some of these issues are ultimately a matter for multilateral cooperation, jurisdictions should be encouraged to provide an internal framework which will allow for
• measures to identify traders;
• clarification of the legal status of online transactions in terms of legally binding contracts;
• authenticity of products and services;
• prohibition of malpractice in the sale and provision of products and services;
• crime reporting or a co-ordination mechanism to report crime to other jurisdictions; and
• effective consumer dispute resolution and redress mechanisms.
With these measures in place, when and if a multilateral agreement relating to online transactions is signed, an internal mechanism will already exist, and the agreement can quickly become effective.
3. Data Privacy
The issue of data privacy is a major concern with consumers, and as noted by UNCTAD is becoming increasingly so with the growth in online commerce. However, the Council believes that data privacy should now become a separate major principle in the UNGCP by itself.
While data privacy is a major issue in relation to online commerce, it is also an issue within the broad range of data collection activities that are engaged in by all forms of business, not simply those engaged in electronic commerce.
Consumer concerns in relation to identity theft, and the sale of personal information for commercial gain, arise in all manner of transactions with business. Moreover, the use of social media is quickly becoming more than simply a discretionary matter for consumers who wish to take full advantage of the information that is provided by these services, and the commercial opportunities that arise. Accordingly, the problem of protecting personal information from unauthorised use that arises in these circumstances is a matter that needs more comprehensive attention.
4. International Cooperation
While the guidelines relating to international cooperation are a worthy part of the document, they appear too general, given the increasingly global nature of consumer transactions, particularly through online commerce.
The Council believes that this is an opportune time for the UN to take more proactive steps in pressing a higher level of international cooperation, that goes beyond the current mix of bilateral and regional consumer protection initiatives. UNCTAD is doing excellent work in capacity building and providing assistance to individual jurisdictions. However, the time would seem right for it to begin the process of also working with various regional groupings to assist them in applying a uniform global approach towards consumer protection measures that go beyond their specific boundaries.
5. Funding of Consumer Protection Agencies
The issue of funding is a perennial matter that is constantly being raised by consumer advocates, for good reason. The level of funding that goes towards supporting consumer advocacy work is largely left to an ad hoc approach by different jurisdictions with no systemic approach taken towards
• how funding levels should be set;
• where funds should be targeted; and
• measuring the direct benefits that funding have in empowering consumers and raising economic performance.
This is typically in stark contrast to the approach taken with regard to industry assistance, for example provision of taxation benefits and business incentives, which are seen as positive and quantifiable measures for economic development. The part that consumers play in the economy is typically relegated to secondary status after business.
The Council considers that some specific principles should be provided in the UNGCP that pressure governments to take a more systemic approach towards the funding of consumer protection measures/agencies, in particular quantifying the benefits that empowered consumers have in raising economic performance as well as setting precise levels of funding that should go towards providing consumer protection measures/agencies in the economy.
