Gateways to the Global Market: Consumers and Electronic CommerceConsumer Affairs
OECD International Forum, Paris
Opening Session; "Consumer Benefits in the New Global Order"
Media to Note:
"New Zealanders took to electronic banking."
"Both the global market and shopping by Internet present new challenges."
"Self-regulation within a sector or industry is another way of providing protection."
"I support the introduction of an International Code of Practice
Secretary-General, Chairperson, ladies and gentlemen, I am delighted to be here representing the New Zealand Government for this very timely international forum "Gateways to the Global Market: Consumers and Electronic Commerce".
As we move towards the 21st Century, using technology is now a way of life for people worldwide. I believe the 20th Century will be remembered as the Age of Technology. We have been fortunate enough to live in an era where advances in this area have been so rapid, as to be breathtaking at times.
In turn though, these technological advances create many issues - whether they be ethical or protection related in the way it is used.
In this technological environment, consumers of goods and services can frequently feel like David facing Goliath - and how much more so with the increasingly global market. There is huge potential in a global market; huge potential for benefits for consumers and huge potential for rip offs.
New Zealand is seen as pioneering in its open approach to the marketplace and there are regular visits of intrigued officials and politicians from all over the world and from places as disparate as Japan, Mongolia and Tonga who come to talk to politicians and officials about the process and the practice of deregulation.
Deregulation and the changes to our public sector over the past decade have fundamentally changed the way the New Zealand economy operates. What hasnt changed is the enthusiastic way in which New Zealanders embrace new technology.
It seems to be part of our culture. We are geographically isolated, but also keen travellers. Remember - our families travelled far to settle New Zealand - it is in our blood. For decades New Zealanders have decided that if the world cant make it to New Zealand, New Zealand will go to the world.
New Zealanders took to electronic banking and EFTPOS with gusto and now, with the Internet, the world is coming to New Zealand. Research from AGB McNair shows that 17 percent of New Zealanders over the age of ten and my own son at 10 years is one of those have access to the Internet and six percent, or 188,000 people, have used it at least once in the last month. Four percent of New Zealanders have shopped by Internet, behind the seven percent of Australians - but I suspect that situation will not exist for long. New Zealanders challenge Australians on most arenas.
We are no longer isolated, but are able to participate on a daily basis in the global market.
A true life example; a New Zealander recently saw a book reviewed in an overseas magazine and decided he wanted to purchase it. The local bookstore said it would take at least three months to arrive. He contacted the publisher on the Eastern Seaboard of the United States through the Internet, placed an order for the book, giving details of his credit card and address for delivery. The book arrived at his home in Wellington four days later.
The potential advantages of an electronically accessible global market allows greater choice and potentially less cost on a range of goods and services for consumers and similarly allows New Zealand companies access to huge new markets.
But there are dangers too. The proliferation of pyramid-style schemes offered on the Internet is an example of the perils that consumers face if they dont have the right information and, equally importantly, the support of their rights through legislation and methods of redress.
New Zealand is a world leader in consumer protection legislation. A deregulated economy is based on the power of the consumer to make choices about the goods and services they wish to purchase. In such an economy, information and legislative back-up is essential.
We have a framework of legislation including the Fair Trading Act, the Consumer Guarantees Act and the Weights and Measures Act that provides both a protection and a mechanism for redress for contracts or purchases within New Zealand.
Both the global market and shopping by Internet present new challenges. These include cross-border fraud; obtaining redress across borders when transactions go wrong; security of payment systems; privacy of information; and international approaches to product safety and liability.
It is vital that Governments do not lag behind technology in analysing and addressing the potential problems as well as embracing the benefits of a global market. The issues I have just raised are obviously not going to be solved overnight, but international forums such as this are a positive step towards addressing them.
Our own Ministry of Consumer Affairs is holding a conference later this month, to facilitate discussion on understanding the business opportunities of, and issues impacting "The Electronic Consumer" from a New Zealand perspective. We are aiming to encourage consumer and community groups and the business sector, to think about and discuss the implications of electronic technology for New Zealand.
I note that already there have been responses internationally to concerns about having to provide credit card and other personal details over the Internet to make a purchase. Two banks in Australia for example are establishing a company that will hold those details separately - essentially providing a protective barrier between the consumer and the provider of the goods or service.
Determining the role of Government and business in responding to the opportunities and issues which the Internet and the global market provide is a matter for each country to decide. Overall, the New Zealand Government favours market-based solutions to any problems that arise, responding to gaps in the market in the way just illustrated, by offering a new service to consumers.
Self-regulation within a sector or industry is another way of providing protection for both customers and businesses which show clearly, that they are aware of the importance of responding to consumers promptly and maintaining credibility in the marketplace.
This does not mean that the New Zealand Government would hesitate to introduce legislation or regulation where it was demonstrably needed.
However, a global market can make legislation aimed at protecting consumers within New Zealand impotent outside of it. An example: someone orders a book from the United States on the Internet from what turns out to be a bogus company. She provides her credit card number for payment and her home address for delivery; the book never arrives; her credit card number has been used by someone else to buy goods and services she knows nothing about; and her address has been handed on to a plethora of marketing people who then inundate her with material she neither asked for nor wants.
Under New Zealands privacy laws, the Consumer Guarantees Act and probably the Crimes Act, she would have been protected within New Zealand - but dealing outside of New Zealand leaves her position uncertain and complex. I believe she is simply not protected by our legislation.
As Minister of Consumer Affairs, I support the introduction of an International Code of Practice for companies selling goods and services electronically. If companies selling on the Internet agreed to abide by the Code and were recognised as having agreed to do so, consumers would have protection across borders that covered all these issues, and mechanisms for redress.
Legislation which sought to reach across borders, on the other hand, would be difficult to write, unwieldy to administer and near to impossible to police.
Governments, consumer and community groups and business people worldwide need to move on this issue. An agreed Code of Practice will take time to hammer out and in the meantime, consumers are a little like David facing Goliath without a slingshot.
We have an opportunity at this international forum to work on ways which will empower consumers to make choices that provide them with the benefits of the global market and allow them to avoid the pitfalls. I am sure forum members will seize that opportunity.