Enforcing business ethics

Published October 5, 2009

Consumers are conned, misled, duped and ripped off with great ease by a strong market segment that brings many producers and traders unfair gains.

Consumer rights are not only violated by traders in the informal sector; some popular national and international brand leaders are also stated to be involved in unethical business practices. Nor it is restricted to a particular trade. It covers a wide range of commodities, products, durables and services”, said a market trend watcher.

A few of them are observed to be so reckless that they sell products injurious to health and wellbeing of the consumers.

Though cases of unethical business practices are quite often reported by the media, the consumers generally seem to have adjusted themselves to hostile trading environment. If it creates stress and tensions in the society, that is another thing.

Altercations between sellers and buyers have come to be treated as normal though occasionally they end in fist fights. If the aggrieved consumer is socially powerful, suppliers give in and settle the dispute by a generous compensation.

Sometimes, substandard pulses are imported and treated with food colour and turmeric powder to improve their external appearance. Acid is used for cleaning edibles such as garlic and ginger. Surprisingly, intentionally or otherwise, substandard tin plates are also occasionally used in packaged food items or beverages may be produced by unhygienic water. These have often been reported in the media but who cares. Those who can afford, avoid using products known to be substandard. Because of ignorance or lack of viable options, consumers can be treated unfairly.

“Even if I know that I am not getting value for my money what option do I have in case of kitchen items? It is absurd to believe that people willingly let others cheat them. Everyone tries to bargain and get his hands on the very best within his reach but what can one do when wheat flour is substandard or tap water is contaminated. They cannot stop eating bread or using water”, a middle class consumer commented.

“Not everyone has time, energy and resources to manage to be treated fairly”, said another frustrated customer who recently stopped supply of bottled water as he believed that his original supplier intentionally stopped delivery of big containers to clear inventory of small sized bottles.

Khawaja Shahab and Mian Manzoor Watoo, federal secretary and minister of industries responsible for consumer protection, could not be reached in Islamabad. Rauf Siddiqui, the minister for industries in Sindh agreed that consumers are vulnerable to unethical business practices.

“I am trying all within my power to isolate the wrongdoers, he said.

The question is what exactly is the government doing about it? Where is the civil society? Why is its voice so feeble that unethical business prospers?

In the past, some attempts were made by the government to rope in market manipulators but these were not backed by suitable legal framework, resources and will to put things right. There was some primitive legislation to prohibit sale of items injurious to health that were introduced in 1960s. In 1995 some meek attempts were made to introduce consumer protection legislation. After 1999 military take-over, ordinances were introduced but in most cases they lapsed for want of enactment by provincial assemblies. Finally in 2005, Consumer Protection Act was passed in Punjab that initiated the setting up of consumer protection courts at the district level in that province.

In Pakhtoon Khaw and Balochistan, a source in the ministry of law told Dawn that Consumer Protection Act has been passed but its implementation has yet to start. In Sindh, however, the provincial governor promulgated consumer protection ordinance twice but it lapsed on both occasions.

Some consumer right activists running non-government organisations informed this writer that in Punjab consumer courts are operating in 11 districts. Three more are being set up. They are said to have given verdicts in 2389 cases. Over eighty per cent of verdicts favoured complainants and in some cases consumers were given compensated up to Rs10,000, beside a compensation for their court expenses.

Informally government officials accept that consumer protection laws are far from ideal. When contacted about half a dozen NGOs gave their version on the issue under discussion. They generally complained of lack of will on the part of the government to act against some powerful lobbies involved.

Consumers picked up on random basis and asked to comment on reasons for lack of public interest in consumer right groups aired varied views. Some Karachiites felt that these NGOs lacked credibility. “We want our genuine complaints redressed but we do not want to be used by these NGOs or provide them the opportunity to strike a bargain with big market players at our cost”, said Mansoor Alam who was haggling with a retailer over reimbursement of money he paid for substandard cola, emitting foul smell.

Consumers stressed the need for consumer protection bodies headed by reputable people whose credibility is above board. They also asked for a network of modern laboratories to certify health- related standard of edibles.

Khalid Mirza, chairman, Competition Commission of Pakistan says that his agency is investigating certain cases of misrepresentation and market collusion by companies but quality issues fall outside the mandate of the commission. “The Competition Law only covers market behaviour of companies and deceptive marketing practices”, he said.

He agreed that there is need to make the market practices fair and transparent so that consumers get a fair deal.

Kawkab Iqbal of Consumer Association of Pakistan informed this writer over phone from Islamabad that his organisation coordinates with Pakistan Standard Quality Control Authority to monitor market abuse by edible suppliers.

He mentioned setting up of a mobile laboratory to carry out on-the-spot surprise checks by a team of concerned citizens and relevant government officials in Punjab.

The representatives of companies contacted dismissed the impression that multinationals and reputable national companies are involved in production of inferior variety of their products. “There are black sheep in all professions and business is no exception but to assume that business is based on cheating would be absurd generalisation. The international companies are very strict on quality issues and their local units maintain product standards as their parent firms carry out checks on regular basis”, a brand manger of a multinational dealing in multiple consumer items maintained.

“These professionals are paid to popularise brands and defend their companies. The absence of law firms specialising in consumer issues reflect lack of awareness and legal environment conducive to protect consumer rights”, said an expert.

The UN general assembly adopted guidelines for consumer protection in 1985 and updated them in 1999. The guidelines provide a framework to all countries particularly developing nations like Pakistanis to elaborate and strengthen consumer protection policies, also if needed, by international cooperation.

In absence of public pressure, preoccupation of legislators on issues other than of public concern and government tied to security problems or securing new commitments for dollar inflows, how much more time the policymakers would take to improve the plight of consumers, particularly from lower strata, is anybody's guess.

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