Role of Consumer Organizations & Relations with State Bodies

Seminar: Enforcement of Consumer Protection22-24 November 2004

Hotel Kapsis – Thessaloniki – Greece

Ioannis Sidiropoulos

INKA/GCFG: Head of International Relations

Key Aspects

NGOs and Democracy in the EU

Sources of Financing of Consumer Organizations

Independence of Consumer Organizations

Consumer Organizations and State Bodies

Factors of Success for a Consumer Organization

The Hellenic Experience

NGO’s and Democracy in the EU

NGOs and Democracy

NGOs are A Leading Factor of Realization of Democracy in the EU

NGOs Constitute the Active Expression of the Especial Feelings, Needs and Beliefs of the Citizens in All Issues of Interest to them

NGOs Are – Should Be: Integrated in the Decision Making Processes, Supported to Effectively Represent the Citizens, Respected as Independent Entities

Main Characteristics of EU COs

EU Consumer Organizations: More than 50 years in action

The peculiarity of COs is based on the political traditions, the level of economic development, the social conditions and cultural values

Main Characteristics of Consumer Organizations Activist Group Player in Civil Society Active Part of the Establishment

Historical Phases and/or Ideological Designations

Activist Groups

Consumer Activist Groups are usually small but quite Active

Based mainly on Volunteers they Carry Dynamism and Emotional Content thus Gaining Sympathy and Support

Their Main Aim is to Persuade Government and Business to Put Consumer Issues on their Agenda

Player in Civil Society

A Consumer Organization - Player in Civil Society has already a Long History and Successful Promotion of Consumer RightsIn this Phase the Organization is a Political FactorThe Main Aim is to Develop Consumer Issues in PoliciesTheir Critical Success Factors are: Deliver Consumers Value for Money (Professional Publications) –

Self Financing Independence (Economical – Political) Credibility - Legitimacy

Part of the Establishment

A Consumer Organization that is Part of the Establishment Plays a Major Role in Democracy

The Main Aim is to Secure Consumer Participation and Affect Consumer Policies

Their Critical Success Factors are: Popular Trust Credibility – Legitimacy Broad Approach to Consumer Policy Issues Effectiveness in Policy Management

Methods of Activity

Provision of Information, Advise and Support to ConsumersDemonstrations and Law SuitsSpecialization: Comparative Product and Services Testing, Market Surveys and Research, Social Studies

Dialogue with Social Partners and the State i.e. via the Participation in Official BodiesCommunication with the Media and Effective Utilization of the Internet CommunityOrganization and Participation in International EventsIntegration into Networks, Coalitions and Cooperation

Sources of Financing for CO’s

Sources of Financing

Self financed Organizations Member or Subscriber Based Organizations Publication of Test Magazine(s) and/or Consumer Guides Information and Assistance Services to Consumers Services to Consumers are – in some cases – partly subsidised by

the state

State Financed Organizations A considerable part of the annual budget is covered by

Governmental support

Specific Projects EU or National Government (Co)-Financing Subsidization towards services provided to consumers

About the Independence of CO’s

Independence I

Unlike most NGOs Consumer Organizations cannot be sponsored by the providers

Consumer Organizations have to maintain independency from both economic and political interests in order to: Provide independent information and support to consumers and Work with the key actors in the market as well as clash with any of

them when necessary

Economical and (thus) Political Independence of Consumer Organizations are: A Principal Issue A Key Success Factor

Independence II

A Consumer Organization may only develop its strength and be effective in its role if it depends: Mainly on the Organization’s own resources and Supplementary on the financial support from the state

It is on the same basis that the Organization may develop its independency, too.

CO’s and State Bodies

Consumer NGOs & State Bodies I

Can a Consumer Organization be Independent if it Receives Financial Support from the Government?

Is it Possible that this Organization may Raise Criticism towards the Government?

Why, in the First Place, should a Consumer Organization turn to the Government for Support?

Consumer NGOs & State Bodies II

Consumer Organizations Receive no Donations from the Private Sector (Independency from the Providers)Consumer Policy is/should be based on the fact that consumers are the weak side in the consumer-to-provider relationshipConsumer Organizations should have the Capacity to Represent and Support ConsumersGovernments are the Only Possibility for Consumer NGOs may receive Support from Financing of Consumer Policy Activities Co-financing of Provision of High Quality of Services

Consumer NGOs & State Bodies III

Independence of NGOs: an Ongoing Political Struggle

NGOs: A Relation that Invokes Cooperation and Political Criticism

State Bodies: Conditional Financial Support Respectfulness of NGO Independence

Common Sins Governments Do

Governments, Parliaments and Enforcement Authorities Usually:

Do not Distinguish Consumer Organizations as Allies

Would Prefer to Support Organizations as long as they Act In Line with their Policy or not come into Conflict with it

Do not want extra-governmental Centres of Power

Prerequisites

A Consumer Organization is (may be) the ‘Weak’ Side of this Relationship, Unless it Presumes: Ideological and Political Integrity Sound Strategy Stable Course and Ability in Political Manoeuvring and Enhancement of their own Income

Factors of Success of CO’s

Critical Mistakes

Persistence in ‘consumable’ activities: these do not leave much behind

Controvert the need for professional expertise and rely on purely volunteer work: no expertise and/or stable activities

Lack of strategy, sound priorities and mid- long term planning

Uncritical adoption of successful ‘foreign’ models

Deadly Mistakes

‘Addiction’ to state or EU funding – misidentification of the need for consumer base: Loss of social role of the organization

Financing of the everyday operation of the organization from project budgets. We should place projects among our priorities, within a specific plan, in the frame of a sound strategy to enhance the viability of the organization and its further

development

Deadly Misunderstandings

‘Successful Organizations owe their success to the favourable environment of their country’. No! they owe their success to the fact that: They developed strategies They planned their priorities They made the right choices in most of the critical issues in their

history

‘Subventions are a de-facto right’: This is half the truth.

A Consumer Organization should ensure A good plan Financial and Technical Capacity to implement the plan and A history of good results

Deadly Underestimation of:

The importance to develop viable activities/services

The value of stable and essential networking and cooperation at National, European and International level – the ‘poor and lonely … cowboy’

The European and International procedures that may develop the organization’s know-how

Cost effectiveness

The use of other’s experiences

The Hellenic Experience

Consumer Policy in Greece I

Consumer Policy has always been a policy of low priority in the country

In the 23 years that Greece is an EU member state, the national consumer policy did not follow the developments and the performance realized at EU level

At practical level national consumer policy was exhausted in: The harmonization of the EU legislation into the national law The ‘enforcement’ by means of communicative political verbalism.

There has never been A National Strategy on Consumer Protection or An Action Plan or A Remarkable Budget

Consumer Policy in Greece II

Consumer Policy has never been considered as an autonomous policy, but: A reflection of the results of other policies A result of purely retroactive activities

In general Consumer Policy has been Hypotonic and Uninspired and Excessively under-budgeted

Results Inadequate Enforcement of Consumer Protection in the Country Lack of Effective Market Surveillance Dissatisfied and Unsafe Consumers Retardation in the Development of the Movement

Effects on the Consumers

EC Survey: Greek consumers feel more protected in other EU countries than in Greece

Effects on the Movement

Creation of Many Small, Non Viable Associations (65 today) encouraged by: The Consumer Law with regard to Consumer Organizations Policies of ‘Equal Distances’ Absence of Criteria of Support

Retardation in Development of the Movement Due to All of the Above and Minimal Financial Support (Consumers actually pay for themselves)

The Consumer Movement

Having no support from the state the Movement should rely on itself

The obvious strategy to strengthen the Movement was Networking and developing Common Activities

INKA and INKA Network

INKA, the first ever Greek consumer organization, was established in 1970

The current structure of the Network of INKA Consumer Organizations (the umbrella organization) was established in 1995 To promote the consumers’ interests in the country

The Practical Role of INKA/GCFG

At practical level the umbrella organization had to undertake, develop and distribute to the Network all the common, critical and high cost activities so that: the cost to performance ratio of the services provided to the

organizations and to the individual consumers should be the best possible

access to these services should be ensured for all organizations in the Network as well as their individual consumers-members, even for organizations who could not financially contribute to the costs

and in some cases services were also provided to individual consumers, regardless the fact that they were members of any organization in the Network or not.

Ioannis SidiropoulosINKA/General Consumers’ Federation of Greece

Head of International Relations3, De La Salle Str. – Thessaloniki – 57010 – Greece

Tel: +30 2310 676220 – Fax: +30 2310 676221ioannis@inka.gr

Thank you for your attention