Professional Documents
Culture Documents
Joyeeta Gupta
Why have milk prices gone up so much? In the olden days, the mothers milked the cow s, the daughters set it out in pans to separate the cream, one of the sons sold it in the maket. Today the agricultural department is mobilized, the cows' sheds are sterilized, the cows are immunized, the milk is homogenized, the supplies are motorized, the dairies are organized, the milkmen are subsidized, the political leaders are energized. The result, the Indian consumer is victimized.
There are 30,000 drug formulations in the market though only 116 are declared to be essential by the Hathi Committe.5 The paradox of the medical profession in In dia is that while there are more than 20,000 unemployed doctors in India, there is only one doctor for every 20,000 people in the rural areas.6 These sample statistics on essential consumer items like food, clothing, shelter, education, insurance, medical services, and municipal services serve to emphasize the need for a regulatory climate to protect the consumer. But in terms of sheer numbers the 750 million consumers in India are a force to be reckoned with. They have at least 200 international bodies supporting their cause. They have around 50 laws which can be interpreted in their favour. There are about 180 consumer bodies at their beck and call. The government is officially recognizing consumerism as a force by creation of consumer agencies. Business and industry, in an effort to cope, has started self-regulating measures. With the Bhopal tragedy came the stimulus for a sudden environmental concern and a realization that safety measures and precautions are not always adopted by the industrial sector. With the Dalkon Shield disaster came the realization that not all products and services coming from the West are safe. With the international declaration of consumer rights came the growing awareness of one's rights. With international precedents of law came the knowledge of the extent of the judicial support the consumer movement may get. In the evolving atmosphere of protectionism and awareness, the attitudes of professionals, policy makers, and managers will have to undergo a drastic change.
established, or if the post of the officer incharge is vacant. The Air Traffic Safety Council, though envisaged by law, is yet to become a reality. The post of the Public Health Analyst in Ahmedabad has been vacant for the past five years. Keeping the two rights of safety and information in focus, the policy of the government should be to ensure that scarce available resources are not diverted _to non-essential ends such as the production of tonics and syrups which account for 25 per cent of our total pharmaceutical production.7 A major restructuring of economic, fiscal, and legal steps is necessary to ensure quality control, safety, and that resources are put to optimal use.
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advertisement could be passed, and any warranty card was acceptable. After-sales service was regarded as a favour accorded by the sellers. The novelty of new goods and new ideas had an attraction for the consumer. But today, blind acceptance is becoming a matter of the past. Consumers have started questioning the validity of the claims made by advertisements of even reputed companies. A case in point is S. Kumar's. The company was compelled to issue a corrective advertisement and withdraw the earlier one.
Ahmedabad which believe in action at the level of influencing policy decisions, raising questions in Parliament, doing active research into various subjects, and invoking the law to protect the rights of consumers. However, the activities of most groups are limited to the extent of their resources, financial and manpower, both in terms of number and commitment. Most consumer groups are financially weak. Only four organizations have a budget of over Rs. one lakh a year. Nearly 55 per cent of the groups have a budget of less than Rs. 1,000 a year. Another weakness is that one out of every five groups in the country receives grants from the state or central government. This often raises the question of objectivity in distribution of these grants. Would these grants be given if consumer groups started questioning the activities of the government? Take the case of the Machchu Dam disaster in 1979, during which 1,800 people lost their lives and property worth Rs. 103 crore was damaged. A Commission of Enquiry was established by the government on August 14, 1979, but was wound up in 1981 before its enquiry was completed. This was challenged by the CERC on the grounds that a Commission cannot be wound up arbitrarily. The High Court ruled in favour of the CERC and the life of the Commission was extended. Thereafter, the Gujarat Government went to the Supreme Court and the Supreme Court upheld the winding up of the Commission without going into the legalities whether a Commission could be wound up before an enquiry is completed. This history has been recalled here to give the nature of the antagonism that exists between the Gujarat Government and CERC over this issue. As a consequence, the Government of Gujarat withheld CERC's grant of Rs. 1.51 lakh for the year 1981-82. The High Court held that this was an arbitrary action and malafide, and the government was compelled to release the grant. Not all consumer groups may have the facilities to fight such manipulative measures of the government. One of the major problems in accelerating the growth and impact of the consumer movement is the fact that often consumers themselves are not cooperative. In one case where CERC wished to lay down the principle of absolute liability in respect of a gas cylinder explosion, the plaintiff went in .for an out-of-court settlement of Rs. 13,000 and so the principle could not be
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established. Had it been established, the manufacturers and the retailers could not have escaped liability by claiming that there was contributory negligence on the part of the user (mostly illiterate servants and uneducated housewives) in an accident. Establishing absolute liability would have pushed cylinder manufacturers to design in such a way that there is very limited possibility of an accident no matter what mistakes the consumer makes while handling it.
Government Response
The government has been responding in fits and starts to the stimuli of consumer groups. While Mahatma Gandhi sought to redefine the status of the consumer/customer in his historic statement that all business exists for the satisfaction of the consumer, it was Mrs. Gandhi who gave the movement a fillip by ascribing the 17th point of her 20-Point Programme to consumer protection. But so far, the status of the consumer has been emphasized more on paper in terms of the fundamental rights guaranteed by the Constitution of India, other laws, and policy statements. In the last four years, however, the government seems to be thinking seriously in terms of concretizing consumer rights. The setting up of the National Consumer Council was a step in this direction. Many of the state governments have also set up agencies. Earlier this year, the Gujarat Government set up the Consumer Affairs and Protection Agency of Gujarat (CAPAG). These government bodies are to help/guide disbursal of funds to consumer groups. Will such bodies ensure that all consumer groups function in tandem ? The central government has also encouraged the growth of certain units in various departments, such as the Planning Commission, the Department of Science and Technology, and the Textile Committee, which are conscious of consumer awareness. The Food and Drug Administration, the Directorate of Marketing and Inspection, the Dairy Development Commissionerate, and several other bodies are also instituted for the purpose of regulating activities.
keen to have a consumer column to educate consumers on their rights. The media appears to have suddenly realized its tremendous potential in getting redressal for consumers, judging from the sudden spurt of complaints redressal columns in most dailies. Some newspapers have attempted to solve consumer problems by threatening adverse publicity to sellers and manufacturers in the event of non-response to complaints. Most of the Indian newspapers and magazines are owned by business magnates and industrial powers. This raises the question whether newspapers would be biased towards their employers and their companies, and whether they would be scared to publish critical articles about organizations from which they get advertisements. This is quite obviously a possibility, but Professor Manubhai Shah, ManagingTrustee of the CERC, is of the opinion that so far this aspect has not been a problem to newspaper groups. He quoted as an example the fact that in one of the leading newspapers, on the very day an article criticizing Sheri Louise appeared, there was, on the same page, a quarter page advertisement of the company. However, the general response to consumeroriented articles appears to be that people know that the consumer is cheated, so what is the point in writing about it. However, updating of facts is necessary for continuous consumer education and for getting a response from the parties concerned. A dialogue in the papers on a particular issue is an effective way of doing so. The history of consumer coverage the world over shows that newspapers that retain their objectivity in consumer coverage appeal more to the consumer and are in great demand. All India Radio, Ahmedabad, has evolved a novel idea of organizing lok samasya ni sansad (Parliament for people's problems), where the general public is invited to question the bureaucrats and ministers on the functioning of the concerned ministry. These question-answer sessions are, thereafter, broadcast over the radio. The Indian Television has so far had two major consumer programmes, one being Janvani, or a question-answer session with a Union Minister; and the other Rajni, where a consumer activist championed the cause with guts and glamour. As the media is maturing, it is perfecting its Vol. 11, No. 2, April-June 1986
technique of reporting without running the risk of defamation. Allegations can prove extremely damaging with respect to the business of the relevant product or service. Besides, remarks made in Parliament are exempted from defamation suits as they are privileged remarks. As such, the manufacturer/manager has to realize that in the media, he has both a trustworthy friend as well as a formidable opponent. The media might accept advertisements of unsafe products, it might even hesitate to publish anything adverse about the product for fear of losing the commission, but it will invariably report news items of national importance. Thus the very fact that Sheri Louise has been condemned in Parliament will get front page coverage in the papers, resulting in an unprecedented loss to its business. The fact that Peerless Insurance Company has been taken to the High Court of Calcutta makes its alleged malpractices news by investing it with dramatic content. Thus, the media is a vehicle through which a company may find itself condemned even without being judged; blacklisted even before it is able to defend itself. There is now an increasing demand for information. The consumer feels that he is entitled to receive correct information and relevant details. He is even willing to crucify a company which wishes to hide behind secret formulae, and magical remedies; the new manager will have to learn to be more open with the consumer.
where an advocate challenged the policy decision to transfer judges. The implication of this is that now anyone can go to court and fight a case where the larger interest of the community is at stake. Over the last two years, the concept of post card litigation has become popular. Under this, anyone can write a post card to the Registrar of the Supreme Court, and if he thinks that the matter is worth investigating, he can start an enquiry. The scope of Article 21 of the Indian Constitution which guarantees the right to life and personal liberty has also been enlarged to cover issues relating to environmental pollution and now an individual may be able to take such a case straight away to the Supreme Court under Article 32 for violation of his fundamental rights. Some laws like the Prevention of Food Adulteration Act have such stringent conditions that very often the magistrate cannot reconcile them with his own conscience, and therefore lets the petty offender off, even though he knows him to be guilty.8 Enforcement of this Act is a little difficult because it involves proof of adulteration from the regulatory agencies. But more often than not, these regulatory agencies are the hot-bed of corruption. For instance, the Public Health Analyst of Ahmedabad was denotified by the Gujarat Government on the advocacy of the CERC, based on an Inquiry Officer's report that he was making Rs. 3,000 everyday by falsely certifying adulterated food as pure.
The concept of an unfair trade practice is becoming wider with the passage of time, and any group of 25 individuals can make a complaint before the MRTPC. In fact, now,even a written complaint to the Director General (Investigation and Registration] of the MRTPC will start off a suo moto enquiry by the Commission. The entire process of taking a manufacturer to the Commission has been so simplified that the manufacturer cannot afford to feel complacent. He has to be constantly on his toes and must acquaint himself with the provisions of the Act. Any statement which comes under the category of false representation, misleading representation, and materially misleading statement can be deemed to be an unfair trade practice. If warranty issued to the public is not based on an adequate test of the product's performance, efficacy or length of life, it could amount to an unfair trade practice. Offering of free gifts and prizes, sale of substandard goods and services, and hoarding come under the purview of the Act. It is only under the provisions of this law that an apparently harmless contest like the 'Made for Each Other Contest' can be dragged to the Commission. The Indian Tobacco Company Limited had organized a 'Made for Each Other Contest' for married couples, one of whom had to be a smoker.The prizes offered included an air-conditioned Premier Deluxe, a Persian carpet, and a silver salver. It was alleged that as the contest was open only to smoking couples, it influenced non-smokers by luring them with the vision of attractive prizes. Besides, as the contest was designed to associate cigarette smoking with happily married couples, it created the impression that smoking was a good habit. The ruling of the Commission in this case was that the stipulation that one of the members of the participating couples should be a smoker is to be removed. It is only under the provisions of this Act that the offer of the Nesshake with every tin of Nescafe can be challenged on the grounds that nothing is available free of cost, and, therefore, those customers who do not wish to avail of the offer of the so-called free gift, should be offered a rebate. Similarly, the issue of equity linked with debentures can be challenged on the grounds that the small investor is forced out of the target market, and therefore such a practice is unfair. An amendment in June 1985 to the Weights Vikalpa
and Measures (Packaged Commodities) Rule has gone a step further in that it has made it compulsory for manufacturers and traders to print the amount of the local taxes on the packaged commodities, so that the the unwary consumer may not get cheated by the unscrupulous trader. This is one major step towards a system of improved labelling practices. Besides the Union Territories, Maharashtra and Gujarat have passed the Household Electrical Appliances Order, 1981, which makes it compulsory for manufacturers of electrical appliances to get their goods certified either by the Indian Standards Institute (ISI) or by the Directorate of Industries. According to the Chief Electrical Inspector of Gujarat, nearly 80 per cent of the electrical goods in Gujarat are sub-standard and around 70-80 accidents are reported every year as a result of handling such equipment.9 Effective implementation of this Order will make the manufacture and sale of electrical appliances, which are not in conformity with the standards set by the ISI, an unprofitable business. The draft Bill on Consumer Protection, 1986, is also being currently circulated across the country for the comments of the citizens. A seminar on the subject was organized by the Ministry of Food and Civil Supplies earlier this year. While it provides for a forum for redressal of consumer complaints on defective goods, the legislation has left government services, public utilities, and the service sector out of its purview.10 If complaints received at the CERC are an index of consumer problems, then over 50 per cent of them are with respect to the service sector. Several suggestions by various consumer and legal groups in the country have been sent to the legislature for the revision of this Bill. Many consumer groups are demanding for drafting of further laws like a Product Liability Act, a Toxic Substances Act, etc. It is a matter of time before a network of comprehensive legislations will be set up in the country to ensure the safety of the consumer.
9. "Consumer Notes," Indian Express, 22.3.1986. 10. "Bill Applicable to Consumer Complaints on Defective Goods," The Telegraph, 20.6.1986.
International Influence
Drawing inspiration from the father of the consumer movement, Ralph Nader, taking guidance from the tools and techniques perfected by consumer groups in the west and in the east, and sharing research results of international importance, the consumer groups in India are transcending national barriers. The consumer groups of the world have established an International Organization of Consumer Union (IOCU), which acts as a central coordinating and regulating agency. The international dissemination of information has served to bring consumer representatives of the world together, united in their struggle
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against exploitation and unsafe goods. For example, when the ill effects of drugs in one country are publicized in other countries, it serves as a warning to the consumers. This led to the agitation in Bangladesh in the 70s for banning drugs which were not essential. When General Ershad came to power, a legislation came into effect limiting the number of drugs sold and banning certain others. Many hazardous drugs have in the past been dumped in India. But with international information seeping into the country the Indian consumer will not be in the dark for long. The recent Dalkon Shield disaster, in which an unsafe intrauterine device was gifted to India as part of US Aid campaign, has brought to surface certain important issues. Indians have realized that not all international gifts are safe and useful. The resultant effect is the sense of scepticism towards new goods and products. At another level, consumers are resisting the export of those goods banned in the home country to unsuspecting third world countries. The United Nations General Assembly has responded to the consumer movement and drafted Guidelines for Consumer Protection for its member countries. In May 1974, the World Health Organization adopted a resolution to frame a code in marketing practices of breast milk substitutes. The International Baby Food Action Network has been actively involved in drafting regulations to control indiscriminate baby food marketing practices. The International Organization of Consumers Union has enlisted seven rights which are applicable to the consumers of the world. They include the right to safety, to information, to be heard, to redressal, to basic goods and services, to consumer education, and to a healthy environment. Cooperative action in support of consumer protection has resulted in international campaigns like The Action Group to Halt Advertising and Sponsorship by Tobacco (AGHAST), Group Action against Smoking Promotion (GAASP), and the Dirty Dozen Campaign (which is a campaign to stop indiscriminate use of pesticides). These international bodies, international campaigns, and the international exchange of information have resulted in bringing the consumer organizations of the world together. Thus,
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if business draws its ideas from the west, consumer organizations too will get information about those products from the west. Several exchange programmes have been organized which encourage Indian lawyers to go to other countries like the USA and Canada to study certain aspects of consumer protection there, and also help in bringing lawyers from other countries to India so that they may share their expertise with us.
One of the cheapest and simplest means available is writing letters to the editors of several newspapers. These letters can generate a response from the general public, and at the same time give exposure to a much neglected consumer problem. Inadvertently, it can also give adverse publity to various manufacturers, professionals, and government services. Once an issue engages public sympathy, it can result in a series of letters on the same subject multiplying the adverse publicity.
Press Releases
Most consumer organizations in the country wishing to publish the results of their research, legal, and educative findings, use this technique to give prompt publicity to their cases.Thus, when research revealed that nearly 50 per cent of the drinking water schemes in a sample of 50 villages in Gujarat were non-functional, the information was published through press release, thus exposing the government. Similarly, when 40 samples of misleading and fraudulent stamping on textiles were collected by a consumer group, the results of the research were made known to the public through press releases. Drafting and publishing press releases can often expose one to the risk of a defamation suit. However, consumer groups are now improving their technique of drafting press releases and as such it has become Vikalpa
extremely difficult to sue them. Sometimes consumer groups refer matters to an arbitrator. In 1981, S Kumar's had introduced Polyacron Suitings through a huge advertisement claiming that the quality of their suiting was equal in performance to high quality polyester blends. The suiting was stamped as 65 per cent acrylic and polyester, and 35 per cent cellulose. However, independent laboratory tests showed that the polyester content was only 10 per cent and that in terms of wash fastness, shrinkage, and crease recovery it was inferior to polyester. The matter was much publicized and the issue was referred to the sole arbitration of Shri Arvind Narottam Lalbhai, Ex-President of the FICCI. S Kumar's then agreed to release a corrective advertisement guaranteeing refund of the cost of the fabrics in case of complaints from the consumers. Another popular technique adopted by the consumer groups is to send representations and memoranda to the concerned officers, ministers, and members of the Parliament, to keep them up to date with the latest consumer development. This may also prompt the ministers to start departmental inquiries and to raise questions in the Parliament. This immediately raises a subject of importance to one local group to the level of national debate. A relatively new technique is to present a petition before the Petition Committee of the Parliament. These petitions are discussed in the Parliament and such discussions have a national impact. Sometimes questions can be raised in the Parliament on people's problems, and they would be answered by the concerned minister. As a part of their educational effort, most consumer organizations publish a leaflet, newsletter, or magazine. Educational talks, seminars, and workshops are also organized. During these sessions, several case studies of consumer exploitation are discussed at length. In the last few such seminars and workshops, marketing practices of famous companies like Bata, Food Specialties, Godrej & Boyce, Kelvinator, etc., were discussed. Litigation Probably the most expensive and time consuming technique adopted by a handful of consumer groups is litigation. There are almost two dozen laws which can be interpreted to benefit the
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consumer. These laws include the Prevention of Food Adulteration Act, 1952, the Indian Standards Act, 1952, the Essential Commodities Act, 1955, the Drugs and Cosmetics Act, 1940, the Agricultural Produce Act, 1937, the Standards of Weights and Measures Act, 1976, the Fruit Products Order, 1955, the Household Electrical Appliances Order, 1976, etc. Some are exclusively for the protection of consumers and others have sections pertinent to the consumer; for example, the Sale of Goods Act, 1930, has sections on Warranties and Guarantees. Consumer groups may go to the courts for the issue of injunctions and award of damages. Recently, the Supreme Court had issued an ad interim relief to the victim of the asbestos industry awarding Rs. 10,000 as damages. The court may also issue a stay in the sale of or advertising of goods and services resulting in great loss to the manufacturer. Sometimes, the courts have gone beyond contractual agreements to establish a principle in favour of consumers. An interesting example would be the case of Zinnat Bibi, the widow of an accident victim. In this case, a third party insurance had been issued by the New India Assurance and the maximum sum assured was Rs. 50,000. It was, however, argued that regardless of the sum assured, the compensation should be awarded as per the formula laid down by the Gujarat High Court. Relying upon a Supreme Court Judgement, the Court ruled that New India Assurance should pay in accordance with the principle, even if the sum is higher than the sum assured.
Research : The Key Ingredient
Most of education, advocacy, and litigation is based on detailed research work. Research provides a foundation for activist work. It is research which reveals whether the scheme of Fair Price Shops in the villages of Gujarat is being carried out as per the policy. It is through research one can identify the major causes of road accidents. With the help of research, the CERC has also been able to show through inter firm comparison that a bus fare hike was not justified as the Gujarat State Road Transport Corporation was not managing its affairs efficiently, economically, and on business principles. Research into the status of household electrical appliances has resulted in a concerted demand for compulsory certification of those
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appliances. It is research which can provoke consumers into demanding the recall of a product. Product'recall is a common solution to the sale and distribution of unsafe products in the more advanced countries. General Motors was forced to recall Corvair from the market and Firestone was compelled to recall its tyres because of public outcry.
Follow-up Individual Complaints
Consumer groups pick up the ideas from individual complaints and develop the case into an issue of public interest. Here is an illustration. A well-known provision store in Ahmedabad had supplied, inadvertently, lonavala kokum unfit for human consumption. Oh a complaint received, CERC intervened. As a result, the store issued a corrective advertisment informing readers that if any of them had purchased the kokum between specified dates, they should return it to the shop and obtain a refund or a replacement. Issuing a corrective advertisement requires a lot of courage for it is very embarrassing and may also result in the company losing its credibility. Currently, the consumer movement has achieved a certain momentum but several demands are yet to be met. Consumer groups are now fighting for increased information on labels of over-the-counter drugs and of packaged commodities. Strangely enough, under the existing laws, the date of manufacture has been made compulsory even though the date of expiry is a far more important information. There are inadequate laws to demand detailed labelling of cosmetic items. Products dangerous to human health are being sold without sufficient warning. CERC is agitating for a statutory warning on bidi packets and pan masala tins. Health warnings on Maggie noodles and products containing sulphates should also be given.
Conclusion
In this environment of change, development, and consumer awareness, one can feel the quickening pulse rate of an economy ready to take off. But unlike most developed countries where development preceded consumer awareness, in India, the consumer movement is likely to complement the development of the country, and by putting the
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necessary brakes in society, it might well succeed in preventing some of the troubles faced by consumer groups elsewhere in the world. However, it should be realized that imposing rules and regulations from above is likely to have little effect, if consumers themselves do not believe in the utility of these regulations. Thus, education and awareness must accompany the process of making regulations and legislations. In fact, consumer education and dissemination of information should form part of any policy to help the consumer. Thus, not only is labelling information on drugs and packaged commodities required, but there should also be awareness among consumers as to what these ingredients are -and what are the benefits and problems associated with them. Business houses can take a tip from here and perhaps compete with other houses in providing labelling information. This may serve as an incentive toconsumers to purchase their products. Besides, putting escape clauses in their contracts with consumers is not going to help business houses for very long. For, the trend in legal interpretation appears to be to consider whether these clauses are valid. Finally, production and marketing of unsafe products may bring in its wake a whole series of tortuous litigations. Nor can the entrepreneurs, who have been watching the fate of the Bhopal litigation, take comfort from the fact that any such litigation will be a long drawn out process during which the real assets of the international counterparts of the company can be disposed of, for people will rise against such acts. It is clear that business, consumers, and government live on each other, live off each other and because of each other. Producers and the government are merely a means to consumer satisfaction. Therefore, in any development process, it is important that both consumers and producers work together in the attainment of their goals.
References
Lee, Stewart M, and Zelenak, Mel J. Economics for Consumers. Belmont: Wadsworth Publication Company, 1982. Sundaram, I S. Consumer Protection in India. Delhi : B.R. Publishing Corporation, 1985, p.l. Tresoline, Shapiro. American Constitution Law. New York : Macmillan, 1979.
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