South Asia Watch on Trade, Economics & Environment (SAWTEE)

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Consumers' rights ridiculed
Published: The Kathmandu Post, 30 April 2004
By: Ratnakar Adhikari

Government has an unfair comparative advantage compared to all other stakeholders in the society, more so in the case of Nepal. It is the only institution that has the luxury to make decisions on the basis of its whim and fancy and/or based on pressures from the vested interest with absolute impunity. It is too adamant to be advised and too powerful to be challenged. Let me start with an interesting example.

The Ministry of Industry, Commerce and Supplies (MoICS) organised a 'speech delivering' jamboree in Kathmandu on 23 April 2004 to mark Nepal’s entry into the World Trade Organisation (WTO). There were seven speakers on the dais – four from the government and three from the private sector, as if other stakeholders were non-existent.

It is surprising to note that the government has not fully understood who are the stakeholders of the trade liberalisation process that the WTO membership will ensue. If it feels that government itself and a handful of people in the business sector are the only stakeholders it is dead wrong. I think 24 million consumers of the country, which ironically include those seated on the dais, have a greater stake in trade liberalisation process than anyone else because of the following reasons:

First, it is the consumer, who is going to benefit from the availability of cheaper imports resulting from trade liberalisation espoused by the WTO. It is the same consumer, who is going to suffer from the import of sub-standard and harmful and products, if the government fails to put in place an effective mechanism to check such imports.

Second, consumers indeed would be making great sacrifice when the government imposes trade barriers to protect domestic industry whether in the form of tariff or in the form of trade remedy measures such as anti-dumping, countervailing, safeguards measures. And when the government imposes Balance of Payment (BoP) measures to prevent flooding of imports draining scarce foreign exchange resources, it is the consumer who is going to suffer.

Third, it is the consumer who is going to face the burnt of protection of intellectual property rights (IPRs) and provision of monopoly to the IPR holder, which is potentially abusive. For example, the increased prices of medicine, books, computer software et al. resulting from the IPR protection to be provided to business enterprises are going to hit the consumers the hardest. Nepal cannot escape from this reality because it would have to comply with the requirement of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) by 1 January 2007.

Fourth, it is the consumer, who is going face the burnt of the import of genetically modified organism (GMO), which cannot be restricted after Nepal’s entry into the WTO. No international trade rule has been framed so far, which would allow countries to impose barrier on the import of GMOs, despite the known implications of GMOs to human health. GMOs could cause allergic reactions, leads to development of anti-biotic resistance in the human body, and is detrimental to biological diversity. Moreover, Nepalese consumers are not yet fully aware but if they have all the information in hand, they would probably reject GMOs out of hand on moral, ethical and religious considerations.

Fifth, the patenting of life form and the mandatory requirement to provide protection to plant varieties leading to monopoly of breeders could have impact at two levels. While farmers will have to purchase expensive seeds and they are likely to be squeezed out of the market, consumers will have to face the burnt of increased price if farmers truly reflect their cost of production in the output price.

The list goes on. To be sure, consumers’ stake in Nepal’s accession to the WTO is very high. However, the government would neither consult them nor listen to them when it comes to making trade related decisions. This is a classic example of political economy – the government would only listen to the organised and powerful groups (such as business chambers), not the unorganised groups (such as consumers or farmers).

The above-mentioned jamboree is not the only example where the consumers were not represented, but this practice has been more or less institutionalised by the government. This is in contrast with the trade policy-making processes in the USA, India or Kenya, for example. In the USA, Consumer Association of the US is included in the Trade Advisory Committee of the United States Trade Representative (USTR). Similarly, in India, Consumer Unity & Trust Society (CUTS) is represented in the Advisory Board on International Trade, chaired by the Commerce Minister. Likewise, Consumer Association of Kenya (CAK) is regularly consulted by the Government of Kenya on trade policy matters.

However, such level of engagements is a distant dream in the case of Nepal. The present government’s definition of 'informed consumer' is the one who insists on taking bill (receipt) after every purchase so that he/she would help government meet its revenue target. The government is fully aware that if it starts educating the consumers about their rights – the latter would start attacking the inefficiency of the government on many sectors. Therefore, it is in the self-interest of the government define 'informed consumers' as narrowly as possible and not to make any conscious effort to educate them.

Incidentally, United Nations Guidelines on Consumer Protection adopted by the UN General Assembly on 9 April 1985 has categorically outlined eight rights of the consumers and out of which six rights have also been included in the dysfunctional Consumer Protection Act, 1997 of Nepal. Among them, the right to represent, right to be informed and right to consumer education are being perennially violated by the government with absolute impunity.

Be that as it may, one of the reasons the government has cited for not being able to include the representative of consumers or any civil society organisations for that matter, is that latter do not have an apex body. This is a facile argument to say the least. In the jamboree, there were representatives from Federation of Nepalese Chamber of Commerce and Industries (FNCCI), Confederation of Nepalese Industries (CNI) and Nepal Chamber of Commerce (NCC). If the government was keen only on inviting the so-called 'apex' body, why was NCC too represented there, when this body itself belongs to the apex body of business organisations called FNCCI?

The three consumer groups in India, USA and Kenya mentioned above, by way of example, are not the apex bodies. They were included on their own merits and the strength of their works. The stakeholders of those countries are to be considered fortunate enough because their governments have a culture of recognising genuine contribution of actors outside the government and private sector, unlike in Nepal where 'who you are' matters more than 'what you do'.

Looks like we are in a country where 'ex-officio scholars' are best placed to design the policies and make decisions that suit the interests of the twin stakeholders so that the government could epitomise the public-private partnership without having to utter a word about which 'public' it is really talking about!

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