Opinion of the Committee of the Regions on the 'Communication from the Commission on priorities for consumer policy 1996-1998` (96/C 337/09)

THE COMMITTEE OF THE REGIONS,

Having regard to the 'Communication from the Commission on priorities for consumer policy 1996-1998` (COM(95) 519 final);

Having regard to the COR decision of 17 January 1996, under Article 198C(4) of the Treaty establishing the European Community, to deliver an Opinion on the subject, and to instruct Commission 7 - Citizens' Europe, Research, Culture, Youth and Consumers - to draft it;

Having regard to the draft Opinion (CdR 5/96 fin) adopted by Commission 7 on 27 February 1996 (Rapporteurs: Mrs Sundback and Mr Johansson),

adopted the following Opinion at its 13th Plenary Session of 12 and 13 June 1996 (meeting of 13 June).

1. Introduction

1.1. Background

1.1.1. The Committee of the Regions has decided to adopt this Own-initiative Opinion on the proposal concerning priorities for consumer policy 1996-1998 since specific regional and local interests are affected. In the COR's experience, consumer policy is at its most effective when it has the support of regional and local political bodies. Moreover, the Commission proposal particularly addresses the question of the 'protection of consumers' interests in the supply of essential services of public utility`. These services are often a regional and/or local matter. The COR appreciates the fact that it was able to avail itself of Commission background material and supplementary information in its work. These contacts have been valuable, since improved consumer protection is of the utmost importance in building the EU citizen's confidence in the Union and, in the COR's view, is one of the prerequisites for implementation of the single market.

1.1.2. The COR notes that the legal basis for EU consumer policy is mainly Article 129a of the Maastricht Treaty, whilst Article 100a of the European Single Act previously provided the legal basis for consumer policy measures. The Maastricht Treaty assumes that the Community will contribute significantly to consumer protection. However, the COR believes that Article 129a should be strengthened and clarified, with a view to improving consumer rights and recognizing consumer policy as an independent policy area. The COR endorses the Commission's view that this provision requires the Community to deal with other consumer issues, above and beyond those affecting the internal market.

1.1.3. The COR would emphasize the merits of a level playing field for the market. It is of great importance to all EU citizens that the Community should take steps to support and complete national policies to protect the health, safety and economic interests of consumers, and provide them with adequate information.

1.1.4. The COR is aware that it is impossible for the Commission to assume too great a responsibility for consumer policy. The COR sees the priorities as a clear statement of the direction the Commission wishes consumer policy to take. It notes that these not only follow in the wake of earlier programmes, but also ensure that new, important areas are included. It is the COR's belief that consumer policy is more than likely to be strengthened and developed over the next few years. This could help to reduce the misgivings many consumers have towards the development of the internal market, and strengthen their trust in the Community as a whole.

1.2. Approach

1.2.1. The last few decades have brought about great changes for the majority of the Community's consumers, partly due to the progression of the internal market and an increasingly comprehensive global market. The range of commodities has increased many times over and the market has become more difficult to predict. Marketing has been stepped up through ever-increasing information and advertising. Concentrations and mergers in production, distribution and retailing have also contributed to the widening gap between consumers and business people.

1.2.2. The individual consumer often needs support in order to avail him/herself of rights, and protection against unfair business practices. This support and protection were expressed as follows in the first EU consumer policy programme in 1975:

- the right to health and safety protection

- the right to safeguarding of economic interests

- the right to complaint and compensation

- the right to information and education

- the right to representation and consultation on consumer issues.

These five basic rights should be enhanced, by adding:

- the right to protection of legal interests

- development of consumer and production patterns which are more environmentfriendly and contribute to sustainable development.

1.2.3. In the COR's experience, if consumer policy is to be effective and successful, then it must involve cooperation between legislation (both market and civil law) and an efficient organization in which different actors at central, regional and local level, and from consumer organizations and trade and industry, can work together.

1.2.4. The COR believes that an assessment of how Member States comply with common regulations would be most helpful. There does not seem to be any particular clash of interests between consumers and trade and industry in consumer affairs. Serious firms value knowledgeable, well-informed consumers who insist on high standards for goods and services and point out shortcomings, just as they appreciate the fact that there are clear rules which safeguard quality in goods and services, help to settle disputes, and simplify cross-border trade.

1.2.5. There are many reasons for looking after consumer interests at a common level within the EU. Consumer issues affect the daily life of all EU citizens. Future regulations should set a minimum level for consumer protection.

1.2.6. There should be active cooperation between the Commission and national, regional and local consumer organizations. There should also be cooperation and exchanges of information between Member States, in order to uphold the Directives and regulations, and so that they are implemented uniformly.

1.2.7. In our experience, political responsibility for providing all EU consumers with local access to support and help with consumer issues should lie with the regional and local level. There is documentary evidence of the need for both information and advice on the various consumer issues. Access free-of-charge should be provided to consumer information, such as consulting databases or the material available in local consumer organizations or authorities.

1.2.8. Local advice in the Member States will provide increased opportunity to learn about the various problems associated with the internal market. Regardless of which country they come from, consumers will be able to get support and advice on goods and services in another country. The effect is to make common solutions more readily available. A local advice network should also be promoted.

2. General comments

2.1. The COR is pleased to note that the Commission has chosen to put forward a proposal which shows the direction consumer policy is intended to take, and how resources will be used. The priorities include measures to improve consumer protection in areas such as services of public utility, financial services and food safety, and measures to promote consumer patterns conducive to sustainable environmental development. In the COR's experience, these areas are of vital importance to all consumers.

2.2. Experience has shown that basic, general consumer protection is required in several of the areas prioritized by the Commission. The COR believes that the proposal gives too much credence to the effects of information and education, which mainly benefit informed, knowledgeable consumers and their special interest organizations.

2.3. Regional and local authorities have a special responsibility to protect the least well-off in society. The COR would recommend that consideration should be given to the social aspects of consumer policy, e.g. special consideration for vulnerable groups, such as children, young people, immigrants, disabled persons, low-income households, etc.

2.4. The COR feels that children and young people constitute a consumer group which should be protected, as they are subjected to powerful marketing influences, particularly via TV advertising. Their lack of experience and the fact that they are easily influenced by group advertising makes them an attractive target group. Measures to protect children and young people as consumers should be taken through both legislation and the education system.

2.5. The COR would point to the obvious health risks posed by incomplete declarations of content, e.g. for people who are of frail health or allergic.

2.6. The COR agrees that proper use of information technology should contribute to a successful consumer policy. Readily-available, unbiased information makes it easier for the consumer to make the right choices. Information Technology can also help the consumer to lodge complaints about individual products and point out market shortcomings.

2.7. The COR would point out that the availability of dispute settlement procedures is one major prerequisite for winning consumer confidence in the development of international trade.

2.8. The COR would draw attention to the fact that the presence of regional and local products does not conflict with effective consumer protection. These products often speak for themselves in terms of quality and variety.

2.9. The COR would underline the importance of heeding consumer commitment, whilst increasing consumer influence in various issues. Circumstances permitting, interested consumers and consumer organizations could become the driving force in many areas of consumer policy. Other special interest organizations, such as those for the disabled, pensioners, trade unions and the environment, can bring useful experience to all consumer issues.

3. Specific comments

In this section, the COR follows the layout of the priority actions set out in the Commission proposal.

3.1. A major effort to improve the education and information of consumers

3.1.1. Knowledgeable, informed consumers are a prerequisite for a properly functioning internal market. Efforts should be intensified in the education field. With basic knowledge and an insight into the field, consumers can use their education to look for the information they need in order to make the right choices. The critical, informed consumer expects consumer information to be reliable and impartial. In the COR's view, such information must be readily available in the EU citizen's locality, and channels must be created so that consumers can notify without delay any shortcomings in the market. It does not feel, however, that information and education alone can provide the consumer with a satisfactory degree of consumer protection. For this, legislation is required.

3.1.2. Concerning education, the COR would particularly point out the need for consumer education at primary school level. Children and young people are increasingly exposed to intensive marketing campaigns. Adequate knowledge is necessary to cope with this. The aim for consumer education should be to enable all school leavers to: manage on their income and run their day-to-day budget; deal with the commercial pressures they are subjected to; realize how their own consumer patterns affect the environment; be aware of their rights and obligations as consumers.

3.2. Enhance, review and update the framework needed to ensure that consumers' interests are fully taken into account in the Internal Market

3.2.1. The COR feels that an assessment of the implementation of Community regulations is required. Member States should follow the directives and regulations which have been adopted, and see to it that they are applied. The internal market cannot function if some countries do not fulfil their obligations.

3.2.2. Efforts to work out dispute settlement procedures must continue. It is of considerable importance to the consumer that complaints and disputes can be dealt with more easily than is currently the case. The Commission should therefore press for the introduction in all Member States of quicker, cheaper procedures for solving disputes. The Commission should also strive to overcome language difficulties and national differences in consumer protection which are an obstacle to cross-border trade.

3.2.3. It is important to improve consumer protection in the EU as far as guarantees for consumer goods are concerned. Measures should aim at a directive which indicates the problems to be regulated by national law, and also indicates an appropriate minimum level of consumer protection.

3.3. The consumer aspects of financial services

3.3.1. The COR shares the misgivings reported by consumer organizations concerning the purchase of financial services. It can currently be difficult for the consumer to feel sufficiently confident in the internal market to, for instance, buy financial services in another country. Information is often found wanting and comparison is impossible; there is a lack of objective advice, and the Directive on distance selling does not cover financial services. The COR welcomes the fact that the Commission is considering drafting a separate Directive on distance selling of financial services.

3.3.2. The COR believes in the usefulness of using increased competition to establish a more functional internal market for financial services. Fiercer competition in this area should mean less expense for the individual consumer. But in order to achieve competition which is of real benefit to consumers in the financial market, a combination of informed, active consumers and clear rules is needed. At the same time, it is important to provide support for vulnerable groups, e.g. on running up too much debt.

3.3.3. An operational cross-border payment system is of great interest to the consumer. The COR endorses continuing work in this field and suggests that the Commission embark upon further studies of the workings of the credit market and this type of financial service from the point of view of the consumer's requirements.

3.3.4. The COR particularly wishes to emphasize the problem of households with a heavy debt load. In this connection, it is important that consumers are better informed by consumer organizations about the risks involved. Common rules should be drawn up in order to offset the damage caused by private individuals running up too much debt.

3.3.5. The COR feels that the Recommendation on electronic payments (payment cards, credit cards, electronic transfer order, etc.) is insufficiently heeded; the case for drafting a Directive should therefore be assessed. The consumer must have access to information regarding the conditions and cost of using these methods of payment, and who is responsible when, for instance, a payment card falls into the wrong hands, or when a cash dispenser is out of order.

3.3.6. The COR endorses the Commission's view that consumer issues must be included in the work on implementation of a single currency. Consumer confidence in the process is a prerequisite for success. The experience of the various consumer organizations should be put to good use.

3.4. The protection of consumer's interests in the supply of essential services of public utility

3.4.1. The COR notes that the phrase 'essential services of public utility` is not defined in detail in the Commission proposal. Work is under way in many Member States to promote the liberalization of these services through deregulation and privatization. This work has the Commission's support. A clash could arise between these efforts and the consumer's right to fair access to services, where these services are concerned. Here the Committee of the Regions would therefore insist that account must be taken of the regional policy and social aspects of consumer policy, e.g. services in sparsely-populated and remote areas, and special consideration for vulnerable groups. Further, consideration of consumer interests is one of the main subjects of the future COR Commission 1 Own-initiative Opinion on public service activity.

3.4.2. For consumers, greater freedom of choice in essential public utility services is only possible if they have some understanding of the price and quality of the services on offer. Such information must be available. Consumers must be informed in order to compare different options, and assess whether they have received the quality services they paid for or have a right to.

3.4.3. The COR feels that the same consumer protection principles should apply to essential public utility services as to other services.

3.5. Measures to enable customers to benefit from the opportunities presented by the Information Society

3.5.1. Developments in information technology should contribute to the development of consumer policy. The new information society can play a key role in promoting opportunities for a functional internal market.

3.5.2. The COR endorses the proposal to guarantee access to the information society, and to make a special investment in education. Such investment, if made at regional and local level, can help to heighten consumer awareness in a whole range of areas. It could also increase the opportunities for consumers to point out market shortcomings, which, in turn, could lead to increased consumer confidence in the internal market.

3.5.3. Information technology also makes it easier for the various national consumer authorities, institutions and organizations to exchange experiences quickly and simply, and to gather information of interest to consumers. The COR would like to see the creation of a network to facilitate local advice on cross-border trade.

3.5.4. The COR is in favour of giving the European Home and Leisure Accident Surveillance System (EHLASS) permanent EU status. It is patently in the consumer's interest that there should be access to information on product-related accidents in the Member States. This provides greater opportunity to work out prevention measures for dangerous products; this is very important for the national economy. It also provides a basis for monitoring product safety legislation, and comparing information between the various Member States. It is important that the system should include all countries, so that facts and figures can be compared from one country to another, and similar measures adopted, with the proviso that it should not infringe data-protection legislation.

3.6. Measures to improve consumer confidence in foodstuffs

3.6.1. The COR would emphasize the importance of improving consumer confidence in the safety and purity of foodstuffs, which should be clearly pointed out in information and marketing. Safe, healthy foodstuffs are extremely important for public health. Ill-health can partly be prevented through good eating habits. Foodstuffs should be given a more independent place in the Community. The inter-relationship between agricultural and food policies should also be highlighted and consumer influence should increase in this area.

3.6.2. The COR feels that the use of additives in foodstuffs should be reduced to a minimum. Additives can cause serious allergy problems. All known allergens and substances which can cause health problems should be declared on the label, regardless of the numbers involved.

3.6.3. The suitability of foodstuffs should increase through tougher quality and health requirements. Conformity to existing regulations on the use of hormones, genetic engineering and irradiation in foodstuffs must be improved, both in basic production and the processing industry.

3.6.4. The COR recommends that consumer demands for comprehensive information on food labels should be met. Adequate content information spares many people from suffering and illness. The COR realizes that much effort goes into working out content declarations which are both understandable and well presented. Here, the experience of the extensive standardization work within the Community should be made use of. The COR sees it as an obvious competitive advantage for foodstuffs producers to give clear, comprehensive information on product content, production methods, animal protection, use of pesticides, etc. Good product information also assists in the control of foodstuffs, since consumer organizations can also participate in the process, together with regional and local authorities.

3.6.5. The COR welcomes the Commission's intention to draw up a Green Paper on foodstuffs legislation.

3.7. Encouragement of a practical approach to sustainable consumption

3.7.1. The COR takes a very positive view of the Commission's decision to give priority to the relationship between consumption and the environment. There is currently much interest in environmental issues, and this should be encouraged.

3.7.2. Many of the environmental problems triggered by consumer patterns are horrifying when we think of the long-term consequences. Many of them are difficult to resolve, whilst others are completely unnecessary. Awareness of the problems is important when trying to change consumer habits. One way to stimulate the development of less environmentally damaging manufacturing processes, products, and consequently, consumer habits, is a successful European labelling system. The Commission should take appropriate steps to ensure that all the components of a product are listed on the label.

3.7.3. The COR agrees that it is currently difficult for consumers to make environmentally-sound choices. Only a few products are eco-labelled, and product information is often inadequate or missing altogether. Marketing claims do not always turn out to be reliable. Information must be improved and all consumers should have access to environmental advice.

3.7.4. In the COR's view, the Commission should adopt measures to encourage both individual consumers and consumer organizations to take part in regional and local projects for reduced environmental impact.

3.7.5. The Commission believes that waste issues require attention. The COR agrees that waste issues - including differentiated waste collection and squandering of resources - are urgent, and that this should particularly be impressed on consumers. Transport is another such issue, and the Committee calls for measures to encourage local projects which lead to more cooperation between consumers in the field of transport, such as car-sharing and car-pooling.

3.8. Strengthening and increasing consumer representation.

3.8.1. The COR welcomes the Commission's ambition to support increased consumer participation in various areas. Strong consumer influence is an important aspect, and could be a determining factor in developing a functional internal market.

3.8.2. The COR endorses the Commission's efforts to enhance the position of consumer organizations. It is its belief, however, that these organizations should be supported first and foremost at local and regional level, since consumer issues affect the citizen's daily life. There are often other organizations which have interests in common with consumer organizations. The local community provides natural opportunities for them to cooperate. The new information technology can help to facilitate contacts between consumer associations in different countries.

3.8.3. The COR feels it is important for consumer authorities and institutions to cooperate with consumer associations. The COR calls on the Commission to encourage the creation of communication networks between consumer organizations, authorities and institutions throughout the Community.

3.8.4. Consumer influence in standardization is very important. The user's requirements must be guaranteed by giving the consumer a real chance to take part in standardization work. Financial resources are needed for this, and consumer organizations need to be encouraged to develop the skills needed for standardization work.

3.9. Assist Central and Eastern European countries to develop consumer policies

3.9.1. The COR endorses the Commission's proposals to support development in Central and Eastern Europe. The COR feels it is important to take account of the circumstances in each individual country - its culture and traditions. Experience has shown that when cooperation with Central and Eastern Europe has its roots at regional and local level, it is often very successful. An important form of support could be cooperation and transfer of experience from regional and local organizations and authorities on consumer issues.

3.9.2. The COR believes that these countries must draft consumer legislation, and provide clear rules for the market economy, as part of their preparations for EU accession.

3.10. Consumer policy considerations in developing countries

3.10.1. The COR endorses the Commission's affirmation that consumer issues are of great importance in developing countries.

3.10.2. The COR would particularly emphasize the situation of children and young people in these countries. They are to a large extent 'commercial victims`, and need strong consumer protection.

3.10.3. Children in developing countries are not only exploited as consumers, but also for their labour. The Commission should consider introducing a label for imported goods from developing countries, making it clear that the goods have not been produced through the exploitation of child labour.

4. Conclusions

4.1. Basic consumer protection is needed in the form of legislation and continued follow-up to ensure it is applied equally in all Member States. Consumer protection should be completed with education and information, which should be available in the citizen's local area. Consumer education should also be compulsory in primary schools. It is our experience that consumer policy is most effective when it has its roots in regional and local political bodies.

4.2. Strong consumer influence is important, and could be a driving force in the development of the internal market. There is no conflict of consumer and business interests in the field of consumer affairs. Serious firms see informed consumers as an asset.

4.3. A successful consumer policy presupposes a functional interplay between actors at Union, national, regional and local level, involving authorities, organizations and business.

4.4. The COR endorses the principles for further work with the Commission's chosen priority areas.

4.5. Measures to increase consumer confidence in the safety and purity of foodstuffs are particularly important.

4.6. Measures to protect children and young people as consumers are particularly important.

4.7. Concrete effort on consumer legislation, laying down clear rules for the market economy, should be included in the preparations for the new Member States.

4.8. The COR takes a positive view of the fact that it was able to be involved so early on in the process leading up to an action line for a future consumer policy. The COR assumes it will also be consulted on the on-going work in this area.

Done at Brussels, 13 June 1996.

The Chairman of the Committee of the Regions

Pasqual MARAGALL i MIRA