[The following is a longer and un-footnoted draft of a sixth Policy Digest prepared for a Sydney Southeast Asia Centre joint research project and an ASEAN Secretariat project on harmonising consumer protection law.]
Recalling or withdrawing consumer products from the marketplace or taking other “corrective action” regarding actually or potentially unsafe or sub-standard products are important parts of consumer law and practice. Manufacturers and other suppliers can be incentivized to monitor the ongoing safety of their products after delivery into the supply chain for consumers, and then undertake corrective action to minimize harm, by private law mechanisms (such as tort claims for negligence brought by consumers) or reputational considerations (loss of customer goodwill etc). However, especially in developing countries experiencing problems with access to justice through the courts or limited media or NGO activity with respect to consumer affairs, public regulation relating to recalls has become significant.
National laws in ASEAN Member States (AMSs) mostly now provide for regulators to require suppliers to undertake mandatory recalls, under specific legislation enacted for (higher-risk) sectors such as automobiles, health products or foods, and/or under general consumer protection laws. In the shadow of such powers, regulators can also more effectively encourage or negotiate with suppliers to undertake (semi-)voluntary recalls. Sometimes suppliers even decide to undertake (purely) voluntary recalls, even without prior consultation with regulators or knowing their extent of their mandatory recall powers.
However, AMSs still lack general consumer protection laws that oblige suppliers to notify regulators when they undertake such voluntary recalls, as required by amendments in 1986 in Australia and 2013 in New Zealand. Nor do such laws in AMSs impose a broader product accident or hazard reporting duty on suppliers, even if the latter have not yet initiated a recall, as required in Australia since 2010 as well as the EU since 2001, Japan since 2006, Canada since 2010, and the US. Both types of obligations can encourage and assist suppliers to undertake recalls more effectively, through drawing on the technical expertise and communication networks of the consumer regulators.
Especially if AMSs take the first step of amending their national consumer protection laws to require suppliers to notify regulators about voluntary recalls, but even now given the mandatory recall powers generally available to regulators, it becomes important to define what is meant “recall” or whatever broader term (like “corrective action”) may be used in the relevant legislation, and provide guidance on when and how to undertake such remedial action effectively. In many major economies that have introduced duties on suppliers to make disclosures to regulators, on top of legislation providing for the latter’s back-up powers to order mandatory recalls, guidelines have recently been published or updated that elaborate quite extensively on rather sparse legislative provisions relating to recalls. These include quite detailed guidelines or handbooks publicized recently by authorities in the EU, the US, Australia, and Japan (although only in Japanese). By contrast, there is little publically-available guidance provided in AMSs. For example, the “Guidelines on Product Defect Reporting and Recall Procedures” are issued by the Health Sciences Authority of Singapore as a relatively short (undated) webpage, and anyway only relate to health products.
This Policy Digest therefore compares such recent guidance materials to identify key components and features that might be elaborated into “ASEAN Recall Guidelines” for consumer products generally. Although aimed primarily at suppliers and regulators, facilitating also evolving information-sharing platforms such as the ASEAN Product Alert website assembling national reports on some mandatory and voluntary recalls, such Guidelines aim also to benefit consumers. Accordingly, peak consumer associations or relevant NGOs should be closely consulted in elaborating such ASEAN Recall Guidelines.
2. Key Considerations for ASEAN Recall Guidelines
The Table below [omitted] compares the topics and structures of five sets of guidance documentation on consumer product recalls.
As a first general comment, it should be noted that the first two are developed primarily by specific regulators: the Health Science Authority in Singapore (because the above-mentioned guidelines apply to the regulatory regime only for health products), and Japan’s Ministry of Economy, Trade and Industry (presumably because it retains some consumer protection policy and enforcement capacity, and had earlier developed guidance for suppliers). The EU’s recommendations, sub-titled “Guidelines for businesses to manage product recalls and other corrective actions”, were developed with funding from the European Commission’s Directorate-General for Public Health and Consumer Protection (DG-SANCO) but led by Prosafe (comprising the product safety enforcement agencies in EU member states) together with three peak business organizations and ANEC (the international NGO partly supported by the Commission and which represents the consumer voice in product standard-setting etc). The US recalls handbook, and the Australian guidelines (originally from 2010), were developed by their respective general consumer regulatory bodies.
Secondly, the respective documentation varies greatly in terms of detail and page length. The Singaporean material is shortest, perhaps because it is in webpage format and/or focuses on a more highly regulated industry (health products) involving a smaller number of larger suppliers which can be expected to collaborate more closely and amicably with the specialist regulator if problems arise with their products and when planning or undertaking recalls. In terms of recommendations for consumer products generally, Australia’s guidelines are the most succinct, whereas Japan’s are the most detailed (albeit with many Appendices, including eg reporting forms). The EU and US documents lie in between, being similar in terms of page length and level of detail.
Thirdly, the structure and topics are broadly similar, but the Japanese and EU guidelines resemble each other quite extensively and arguably provide the most logical structure, as highlighted in grey in the Table below [omitted]:
Singapore – Guidelines on Product Defect Reporting and Recall Procedures (health products) approx. 3pp
Japan – Recall Handbook for Consumer Products (2010) 117pp
EU – Corrective Action Guide (2011) 47pp
US – Recall Handbook (2012) 29pp
Australia – Consumer Product Safety Recall Guidelines (rev’d 2014) 19pp
[Rest of table – omitted]
Comparing structure and topics, focusing especially on the Japanese and EU documents, future ASEAN Recall Guidelines could usefully elaborate recommendations across the following five broad headings:
(i) General background: This should clarify that the aim is broadly to assist suppliers and regulators to collaborate in reducing actual or potential product-related health hazards to consumers, by providing guidance into when and how to undertake recalls or other corrective actions (such as repairs or monitoring) depending on the type of hazard. This section should explain the legal backdrop, identifying provisions in national laws on consumer protection generally dealing with mandatory and possibly voluntary recalls, and the roles of general versus specialist consumer regulators. It can also point to evidence (including some case studies) where timely and effective recalls have enhanced rather than undermined product or brand appeal.
(ii) Planning for corrective action: This should emphasise the need for advance coordination both within the organization (including eg appointing a recall coordinator) and with major trading partners (including any abroad), and effective maintenance of sales, complaints and other product-related records (even if not required by specific legislative provisions).
(iii) Risk assessment: This is separated out in the EU guidelines from “risk management”, which is useful as it should be a more objective and science-based analysis, as is increasingly recognised under international and national laws dealing eg with food safety. Especially for industries with smaller firms (SMEs), more basic guidance may be needed such as the possible types of risks or indeed defects (manufacturing, design or instruction/warning defects). The EU guidelines include a detailed Annex (including a flowchart and indicative scenarios), drawing on Commission Decision 2010/15/EU, involving:
a. Unambiguous description of the product
b. Identifying the relevant type of consumer
c. Description of the injury scenario
d. Determination of the injury’s severity
e. Determination of its probability
f. Overall assessment of the risk level (low, medium, high, serious)
g. Possible adjustment depending on the level’s plausibility
h. Development of various injury scenarios to identify the product’s highest risk
i. Documenting and passing on the risk assessment.
Further assistance can come from the International Standards Organisation, for example, namely the recommendations contained in ISO/IEC 31010:2009, Risk management – Risk assessment techniques.
(iv) Managing the risk and corrective action: This involves developing a proportionate and appropriate response to the identified risk, including effective communication with regulators, suppliers (especially if only a trade-level recall is deemed necessary) and consumers. Contemporary guidance documents include very useful materials on effective communication channels and techniques, especially in an internet era. Monitoring and documenting progress is another important aspect of managing the identified risks and selected corrective action program. Again, further guidance can be obtained eg from ISO 31000:2009, Risk management – Principles and guidelines.
(v) Learning from experience: The EU guidelines, and to a lesser extent the Japanese handbook, usefully emphasise that there should be feedback loops institutionalized and implemented so that the organization (and indeed the regulators) learn from what went well or otherwise during the recall.
The comparative analysis confirms that there is significant overlap in the approach and coverage of recalls guidelines recently released in major economies. These can be quite easily developed into ASEAN Recalls Guidelines for Consumer Products in general, with support from the regulators in those economies as well as AMSs, together with the ASEAN Secretariat and relevant international organizations (such as the Organization for Economic Cooperation and Development, which had developed a Global Recalls Portal). National authorities in AMSs can make these Guidelines publically available, perhaps adding an Annex with more detail (eg on national legislation on general and/or specific consumer products, or the special circumstances in developing country environments).
In principle, the general consumer regulators should take the lead in developing such ASEAN Recalls Guidelines. However, there should be close collaboration with specialist regulators with extensive experience in corrective actions (eg in health products, foods and vehicles). Peak industry and consumer groups can also be consulted.
These Guidelines can begin with a lower level of detail (eg closer to the current Australian guidelines), but make cross-reference to the other documentation mentioned above. The ASEAN Guidelines may later develop more detail, and should certainly be periodically revised in light of regional and global experiences with product recalls.