OECD CONFERENCE ON “CONSUMER EMPOWERMENT AND RESPONSIBILITY BUSINESS CONDUCT” CONSUMER PROTECTON IN VIETNAM Nguyen Dinh Tai Central Institute for Economic Management
1. Problems with consumer protection in Vietnam • Customers in Viet Nam often have to suffer from unsafe poor-quality products which break down just after purchase and are sometimes life-threatening. Even when dealing with life-threatening products, consumers have no legal recourse for protection, let alone compensation. • A number of high-profile cases have recently come to light in which consumers have bought fake, poor quality and/or goods ranging from vegetables sprayed with pesticides, cosmetics containing toxic chemicals and fake medicines.
1. Problems with consumer protection in Vietnam • The Ministry of Science and Technology of Vietnam reported in September, 2008 that over 30 gasoline stations in the country had been caught overcharging for fuel or selling adulterated gas mixed with anything from kerosene and water to mud and booze. Many had rigged their scales to show higher amounts than had been dispensed. • But commercial fraud does not end there. The ministry also said that over 93 percent of stylized crash-helmets in the domestic market were unsafe for motorcyclists. All this on top of the fact that market control agencies have blamed kidney stone cases in several Vietnamese children on melamine-tainted milk.
1. Problems with consumer protection in Vietnam • A survey by the Viet Nam Standards and Consumers Association (Vinastas) in August 2008 showed that only 41 percent of consumers in 10 cities and provinces in Vietnam were fully aware of their rights while half believed it was the job of the government or watchdog organizations to make sure their rights were protected. • According to Vinastas, this organization receives 1,000 complaints and petitions per year, while the Consumer Protection Unit has received perhaps 100 complaints in the last 5 years. The fact is most people don’t know who to turn to for help, and of those that do, many believe these official bodies are ineffective. Vinastas had settled about 70 to 80% of the 1,000 complaints filed with it last year out of court. The number sounds good, but too small.when considering Vietnam’s 87- million plus population.
1. Problems with consumer protection in Vietnam • Unfair trade practices were rife throughout nearly all sectors in Vietnam. The Association estimated the average consumer lost between 8 to 10 percent of the value of their purchases so far this year due to unfair practices. • Greedy and irresponsible traders are rarely brought to court because consumers who complain about getting cheated fail to provide even the simplest of evidence, such as a receipt.
1. Problems with consumer protection in Vietnam • The relevant agencies have always called on consumers to “wise up”. However, it is not easy to become a wise consumer, and it is very important to have the necessary modern facilities to identify the quality of products. To become a wise consumer, consumers should firstly learn about their rights when making transactions to create a combined strength among the community. In fact, many recent scandals over food safety and hygiene have shown the vital role of consumers in exercising their rights. • In brief, consumer rights in Vietnam have been seriously violated in various ways. So far, however, no penalties or sanctions have been imposed on enterprises and producers that break the law.
2. Ineffective current Ordinance on consumer protetion • Legislation on protecting consumer rights in Vietnam is Ordinance on consumer protection which has been effective since October 1, 1999. This legal document clearly stipulates that consumers have eight basic rights, including satisfaction, safety, information, choice, compensation, education and having a voice and a healthy environment. If their rights are violated, consumers can complain and ask for compensation according to legal regulations. • Nevertheless, a recent survey conducted by the Vinatas showed that nearly half of Vietnamese consumers are not fully aware of their basic rights, while the remaining consumers do not know or do not care about them.
2. Ineffective current Ordinance on consumer protetion • In fact, complicated formalities have prevented people from enjoying their rights as consumers. Furthermore, it is not easy for consumers to provide evidence of violations. Their purchasing habits such as not asking for receipts or buying goods in flea markets also make it extremely difficult for consumers to exercise their rights. • The main reason is that under the ordinance, consumer rights are defined too broadly to be feasibly implemented. Provision 8 of the Ordinance, for example, states that consumers are ensured their lives, health and environment will be safe when using goods and services. However, no regulations exist to specifically implement the provision; there are no guidelines on how exactly consumers should be ensured of their safety. Therefore, these provisions seem to be only meaningful in theory. Moreover, there is lack of strong punitive measures for violators.
2. Ineffective current Ordinance on consumer protetion • According to Provision 16 of the Ordinance, manufacturers and service suppliers have a responsibility to settle all complaints and petitions from consumers concerning their products and services in terms of standard, price, quality and quantity. No provision exists however to bring sanctions on those that do not comply with provision 16. • The shortcomings of these provisions meant Vietnamese consumers get no protection so far. Without effective laws, the consumer will always lose and they have no choice but to forget it and move on.
2. Ineffective current Ordinance on consumer protetion • Moreover, there should be an agency in charge of protecting consumer rights. At present, at the central level, the Consumer Protection Board of the Competition Management Department under the Ministry of Industry and Trade is the only agency responsible for protecting consumer rights. However, the board only has seven employees, so it is difficult for them to protect the rights of more than 86 million consumers. The Vietnam Standards and Consumer Protection Association currently has branches in 30 out of the 63 provinces and cities nationwide, but they mainly deal with violations through negotiation and conciliation. However, when public health and safety is put at risk, those in charge should be prosecuted.
3. How to improve the situation • All producers must be educated about their social responsibility, as well as producing safe food and a good distribution channel for safe food are musts. • State agencies in charge of food security must help the government to coordinate food security control activities in the distribution of food to society.
3. How to improve the situation • In Vietnam, to put regulations on consumer protection into practice, the relevant agencies should consult with consumers on the law and make them better aware of their rights. • The law on protecting consumers’ rights which is being drafted will be submitted to the National Assembly and expected to be approved by 2010 should focus on boosting the role of associations in protecting consumers. The law will define clearly and specifically the rights of consumers and the methods of ensuring those rights; the responsibilities of manufacturers and service suppliers and the sanctions to punish violators.
3. How to improve the situation • The law has to force firms to compensate consumers they swindle by overcharging, mislabeling or selling counterfeit goods. • Moreover, the functions and tasks of agencies who settle consumers’ complaints and petitions will also be defined. • Local buyers need to collect evidence and officially report their complaints if they want to challenge businesses that rip people off.
3. How to improve the situation • The consumer boycott of bad products can make a serious impact on producers, which are now forced to change their behaviour. It is obvious that if consumers know how to use their rights and join efforts to boycott poor quality products, producers and retailers will have to respect them accordingly. On the contrary, if consumers lack a knowledge of the laws, service providers will make use of this and take advantage of them. • In other countries, consumers have the power and the rights to boycott poor quality products. They also know how to use their rights to force enterprises to adjust their policies and fulfill their responsibilities. Apart from a synchronized legal system, consumers in these countries also receive support from agencies, such as the Consumer Protection Association.
WHAT CONSUMER WANTS? • QUALITY PRODUCTS • EFFICIENT SERVICES • TIMELY DELIVERY • EFFICIENT AFTER SALE SERVICE • TRUTHFUL ADVERTISEMENTS • REASONABLE PRICING STRUCTURE • ACCURACY IN WEIGHTS AND MEASURES
WHAT CONSUMER GETS ? • QUALITITATIVELY DEFICIENT GOODS OR SERVICES • QUANTITATIVELY DEFICIENT GOODS OR SERVICES • EXCESSIVE PRICES • INSUFFICIENT INFORMATION • MISLEADING ADVERTISEMENTS • UNFAIR TRADE PRACTICES
CONSUMER IS KING • A CONSUMER IS THE MOST IMPORTANT VISITOR ON OUR PREMISES. HE IS NOT DEPENDENT ON US. WE ARE DEPENDENT ON HIM. HE IS NOT INTERRUPTION IN OUR WORK – HE IS THE PURPOSE OF IT. WE ARE NOT DOING HIM A FAVOUR BY SERVING HIM. HE IS DOING US A FAVOUR BY GIVING US AN OPPORYUNITY TO SERVE HIM.
CONSUMER RIGHTS • 1. RIGHT TO BASIC NEEDS • 2. RIGHT TO SAFETY • 3. RIGHT TO INFORMATION • 4. RIGHT TO CHOICE • 5. RIGHT TO REPRESENTATION • 6. RIGHT TO REDRESS • 7. RIGHT TO CONSUMER EDUCATION • 8. RIGHT TO HEALTHY ENVIRONMENT
1. RIGHT TO BASIC NEEDS • TO HAVE BASIC GOODS AND SERVICES WHICH GUARANTEE SURVIVAL, LIKE FOOD, CLOTHING, SHELTER, HEALTH CARE, EDUCATION.
2. RIGHT TO SAFETY • TO BE PROTECTED AGAINST PRODUCTS, PRODUCTION PROCESS AND SERVICES WHICH ARE HAZARDOUS TO HEALTH OR LIFE.
3. RIGHT TO INFORMATION • RIGHT TO BE GIVEN THE FACTS THAT ARE NEEDED TO MAKE INFORMED CHOICE OR DECISION. TO BE PROTECTED AGAINST MISLEADING ADVERTISEMENTS OR LEBELLING.
4. RIGHT TO CHOICE • RIGHT TO HAVE ACCESS TO VARIETY OF PRODUCTS AND SERVICES AT COMPETITIVE PRICES WITH AN ASSURANCE OF SATISFACTORY QUALITY AND SAFETY.
5. RIGHT TO REPRESENTATION • RIGHT TO BE REPRESENTED SO THAT THE CONSUMERS INTERESTS RECEIVE FULL AND SYMPATHETIC CONSIDERATION IN FORMULATION AND EXECUTION OF ECONOMIC POLICIES
6. RIGHT TO REDRESS • RIGHT TO BE COMPENSATED FOR MISREPRESENTATION, SHODDY GOODS, UNSATISFACTORY SERVICES
7. RIGHT TO CONSUMER EDUCATION • RIGHT TO ACQUIRE KNOWLEDGE AND SKILLS TO BE AN INFORMED CONSUMER THROUGHOUT LIFE
8. RIGHT TO HEALTHY ENVIRONMENT • RIGHT TO A PHYSICAL ENVIRONMENT THAT WILL ENHANCE THE QUALITY OF LIFE
CONSUMER RESPONSIBILITIES • 1. CRITICAL AWARENESS • 2. ACTION • 3. SOCIAL CONCERN • 4. ENVIRONMENTAL AWARENESS • 5. SOLIDARITY
1. CRITICAL AWARENESS • TO BE MORE ALERT AND QUESTIONING ABOUT THE PRICE AND QUALITY OF GOODS AND SERVICES WE USE.
2. ACTION • TO ASSERT AND ACT TO ENSURE THAT WE GET A FAIR DEAL.
3. SOCIAL CONCERN • TO BE AWARE OF IMPACT OF OUR CONSUMPTION ON OTHER CITIZENS, SPECIALLY DISADVANTAGED OR POWERLESS GROUPS.
4. ENVIRONMENTAL AWARENESS • TO UNDERSTAND THE ENVIRONMENTAL CONSEQUENCES OF OUR CONSUMPTION. TO CONSERVE NATURAL RESOURCES AND PROTECT THE EARTH FOR FUTURE GENERARTIONS.
5 .SOLIDARITY • TO ORGANISE TOGETHER AS CONSUMERS TO DEVELOP THE STRENGTH AND INFLUENCE TO PROMOTE AND PROTECT CONSUMER INTERESTS.
RAISING CONSUMER AWARENESS • 1. GOVERNMENT • 2. BUSINESS • 3. MEDIA • 4. SCHOOLS AND COLLEGES • 5.VOLUNTARY ORGANISATIONS
1. GOVERNMENT • SUPPORT TO CONSUMER ORGANISATIONS • ENACT CONSUMER FRIENDLY LAW AND ENSURE ENFORCEMENT • CONSUMER POLICY • CITIZEN’S CHARTERS • OMBUDSMEN
2. BUSINESS • CODE OF CONDUCT AND SELF- REGULATION • IN-HOUSE CONSUMER SERVICE CELL • CORPORATE SOCIAL RESPONSIBILITY
3. MEDIA • ADEQUATE COVERAGE TO ACTIVITIES OF CONSUMER ORGANISATIONS • REGUALAR COLUMN ON CONSUMER EDUCATION • SPECIAL SUPPLEMENTS ON CONSUMER PROTECTION • INTERVIEWS WITH PEOPLE ENGAGED IN CONSUMER GUIDANCE ACTIVITIES • PUBLICATION OF JUDGMENTS ON CONSUMER PROTECTION CASES • REFUSING TO RELAESE MISLEADING ADVERTISEMENT
4. SCHOOLS AND COLLEGES • INCORPORATING CONSUMER EDUCATION AT SCHOOL AND COLLEGE LEVEL. • BASICS OF CONSUMER PROTECTION AT SCHOOL LEVEL • LEGAL ASPECTS OF CONSUMER PROTECTION AT COLLEGE LEVEL
5. VOLUNTARY ORGANISATIONS EDUCATION & TRAINING COMPLAINTS HANDLING PRODUCT TESTING RESEARCH & SURVEY LOBBYING & ADVOCACY