Category: Consumer law and policy

ASEAN Consumer Law Harmonisation and Cooperation: Achievements and Challenges

This is the title of my next book, co-authored with Profs Justin Malbon, Jeannie Paterson and Caron Beaton-Wells in Melbourne, which will be published by Cambridge University Press around the end of this year in its series on “Integration Through Law: The Role of Law and the Rule of Law in ASEAN Integration“. It is the first Western-language research monograph detailing significant developments in consumer law and policy across the Association of Southeast Asian Nations, underpinned by a growing middle class and implementation of the ASEAN Economic Community from 2016. Eight chapters examine consumer law topics within ASEAN member states (such as product safety and consumer contracts) and across them (financial and health services), as well as the interface with competition law and the nature of ASEAN as a unique and evolving international organisation. We include insights from extensive fieldwork, partly through several consultancies for the ASEAN Secretariat over 2013-5, to provide a reliable, contextual and up-to-date analysis of consumer law and policy development across the region. The volume also draws on and contributes to theories of law and development in multiple fields, including comparative law (with references also to consumer law developments in Australia, Japan and the EU), political economy and regional studies.

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Guest blog: review of “ASEAN product safety law”

Written by: Prof Sothi Rachagan (Vice-Chancellor, Nilal University, Malaysia)
[Prof Rachagan, doyen of consumer law and policy studies in Southeast Asia, has kindly provided the following review of my conference volume co-edited with Chula Uni Prof Sakda Thanitcul, published by Winyuchon (Bangkok) in 2016 in English plus Thai translation, with a version of the introductory chapter available here.]

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Reforming Product Safety Law: Good and Bad News from the Australian Consumer Law Review

Written by: Luke Nottage and Catherine Niven
In 2008, as consumer confidence in Australia took a big hit from the Global Financial Crisis, the Productivity Commission published a report advising the federal Treasurer to lead a belated “re-harmonisation” of consumer protection law. The State and Territory governments agreed to enact substantive provisions mirroring those legislated by the federal Government, thus creating a uniform “Australian Consumer Law” (ACL) in force nation-wide from 2011.
This reform project was mainly “sold” as saving transaction costs for businesses domestically, but also in their dealings with overseas markets that have also been “trading up” to higher standards of consumer protection law (including now ASEAN). As such, for example, all Australian jurisdictions introduced general provisions voiding unfair contract terms along the model adopted by the European Union (EU) in 1993, following the lead of Victoria in 2003. More directly impacting on consumer product safety, the ACL added a novel reporting requirement that suppliers notify the Australian Competition and Consumer Commission (ACCC) about serious product-related accidents, introduced already in 2001 by the EU – albeit in more expansive form.
In addition, the Australian governments also agreed to review the operation of the ACL after five years. In March 2017, with little fanfare, officials in “Consumer Affairs Australia and New Zealand” (CAANZ) released a Final Report including recommendations for ACL reform. They include mixed blessings for enhancing consumer safety law.

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Symposium: Consumer and Contract Law Reform in Asia

Private law and regulatory frameworks impacting on consumer protection are being reformed in many parts of Asia, the world economy’s fastest-growing region. This development is important for Australian exporters and outbound investors, as well as policy-makers engaged over 2016 in a five-yearly review of the Australian Consumer Law. [My Submission to that inquiry is here – Download file]
This symposium on 10 August 2016, hosted by the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS) with support from the Australian Network for Japanese Law (ANJeL), brings together experts from around the Asian region to outline and compare reform initiatives achieved or underway in consumer law as well as contract law more generally. [On 12 August at UNSW, ANJeL is also supporting a symposium on “Democracy, Pacificism & Constitutional Change: Amending Article 9?”: the draft program is here – Download file.]

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New Year and New Books on Asian Law – Consumer Law and Corporate Governance

Happy New Year of the Monkey! I am also pleased to report that two new books will be forthcoming.
One is co-edited by Chulalongkorn University Law Faculty (and immediate past Dean) Prof Sakda Thanitcul, who like me studied for an LLD at Kyoto University (but, unlike myself, persevered and obtained the degree there, as well as another PhD from the University of Washington). Entitled “ASEAN Product Liability and Consumer Product Safety Law”, this volume adds the editors’ introduction plus two other general chapters to ten country reports presented and discussed at a major international conference held late July 2015 in Bangkok, funded by Chulalongkorn University’s ASEAN Studies Centre and hosted at Thailand’s Ministry of Commerce facilities. Thanks also to publication support from the Centre as well as the Sydney Southeast Asian Centre (SSEAC), complimentary copies of the English version will be distributed to delegates at the 2nd ASEAN Consumer Protection conference, also being held in Bangkok over 14-15 December (see here for my co-authored volume of Policy Digests & Case Studies for that conference, and Volume 1 tabled at the 1st conference in Hanoi a year earlier). In addition, the book will be translated and published in Thai in early 2016, through Thailand’s leading legal publisher (Winyuchon), to reach a broader audience at reasonable cost. With priority to national and international regulators and NGOs, other complimentary copies of the English version are available on request, to assist in the important and ongoing task of harmonising and strengthening consumer law and enforcement, amidst major trade and investment liberalisation initiatives underway in the region – including now the Trans-Pacific Partnership FTA. The editors’ introductory chapter is also freely downloadable via SSRN.com, and Prof Sakda will be visiting the University of Sydney in late July 2016 thanks to further support from SSEAC. Bios for all contributors to this book are listed below.*
Southeast Asia has long been known as a particularly dynamic part of the global economy. In 2007 the leaders of the ten member states of the Association of Southeast Asian Nations further agreed to accelerate the project to complete a single market or “ASEAN Economic Community” by the end of 2015. Less well known is that their blueprint also committed to improve and harmonise consumer law, to prevent a “regulatory race to the bottom”. A new Committee has encouraged member states to enact strict product liability regimes (as in Australia, Japan and the EU) aimed at making it easier for consumers (and sometimes even businesses) to be compensated for harms suffered from unsafe products. ASEAN states have also introduced new or revised laws allowing regulators to set mandatory safety standards before products are put into circulation, and to enforce post-market controls such as bans and recalls of unsafe products.
The second new book is on “Independent Directors in Asia”, co-edited for Cambridge University Press with ANJeL stalwarts Profs Harald Baum (MPI Hamburg), Souichirou Kozuka (Gakushuin, Tokyo) and Dan Puchniak (NUS). As previously mentioned on this Blog, contributions have been extensively workshopped at major conferences in Berlin and then Singapore, as well as by individual authors in other forums. A longer version of the chapter comparing Australia, which I co-authored with Fady Aoun, is also forthcoming in early 2016 from the University of Miami International and Comparative Law Review. Core aspects of corporate governance in Asia provides essential backdrop to firms’ dealings with consumers as well as their cross-border engagement facilitated nowadays through FTAs.
* LIST OF CONTRIBUTORS to the ASEAN Product Liability and Consumer Product Safety book:
RIZA BUDITOMO
Riza Buditomo is an Associate Partner in the Corporate & Securities practice group of Hadiputranto, Hadinoto and Partners (member firm of Baker & McKenzie). He graduated from the University of Indonesia with a B.A. Law in 2004, and Accounting Diploma in 2002. With an educational background in accounting and tax as well as law, Riza focuses on corporate/commercial, trade and tax work. This includes consumer protection, export/import, food industry, and anti-dumping issues. He has also been involved in several due diligence projects for acquisitions and mergers, drafting legal due diligence reports, providing various types of legal advice and assisting major clients in a number of high profile transactions. Riza is admitted in Indonesian Courts including the Tax Court. Riza is also a certified customs consultant.
RUMONDANG SARI DEWI
Rumondang Sari Dewi is an Associate in the Corporate & Securities practice group of Hadiputranto, Hadinoto and Partners. She graduated from the University of Padjadjaran with a B.A. Law in 2009. She has been involved in assisting and advising clients in various corporate and trade matters. She also has experience assisting clients in dealing with government authorities on licenses and approvals.
SORNPHETH DOUANGDY
Sornpheth Douangdy is Associate Director in charge of both legal and tax services at PricewaterhouseCoopers (Lao) Company Limited. Prior to working at PricewaterhouseCoopers, he was the Deputy Head of the Law Research Division in the Law research and International Cooperation Institute and the Ministry of Justice in Lao; Deputy Head of the Law Research Division in the Law Research Centre at the Ministry of Justice; a member of the Civil Law Working Group to prepare the Civil law Textbook and to amend Contract Law, Tort Law, and Law on Economic Arbitration Organisation; a lecturer in Intellectual Property Law at the Law Colleges; the co-ordinator of Ministry of Justice to the UNODC; a member of the secretariat team to implement the UN Convention against Corruption; and a judge of Saysettha Court, Vientiane. Sornpheth holds a bachelor degree from the Faculty of Law and Political Science at the National University of Laos, and a post-graduate Business Law and Commercial Law degree from Curtin University of Technology, Australia.
GERAINT HOWELLS
Geraint Howells is Chair Professor of Commercial Law and Dean of the Law School at City University of Hong Kong; barrister at Gough Square Chambers, London (though not currently practising) and former President of the International Association of Consumer Law. He previously held chairs at Sheffield, Lancaster and Manchester and has been head of law schools at Lancaster and Manchester. His books include Comparative Product Liability, Consumer Product Safety, Consumer Protection Law, EC Consumer Law, Product Liability, European Fair Trading Law, Handbook of Research on International Consumer Law and The Tobacco Challenge. He has undertaken extensive consultancy work for the EU and UK government as well as for NGOs.
JOCELYN KELLAM
Dr Jocelyn Kellam has a particular interest in product liability in the Asia Pacific. Previously a partner with one of Australia’s national law firms and an Adjunct Professor of Law at the University of Sydney she holds a PhD (USydney) and LLM (Tuebingen) in comparative product liability law. Jocelyn is the general editor of a comparative text, Product Liability in the Asia Pacific (Federation Press, 3rd ed 2009), and the former general editor of the Australian Product Liability Reporter.
KHIN MAR YEE
Khin Mar Yee (LLB, LLM, PhD) is Professor and Head of the Department of Law, University of Yangon. Her teaching and research interests include international trade law, intellectual property law and the Law of the Sea.
JOHN KING
John E King is a partner in Tilleke & Gibbins, heading the firm’s Cambodia practice in Phnom Penh. He is supported by a strong team of local Khmer advisors and the international expertise of the firm’s offices across Southeast Asia to provide advice that is tailored to the franchising, life sciences, and technology sectors. John previously led the firm’s Dispute Resolution Department for several years, and he played a central role in building Tilleke & Gibbins’ Hanoi and Ho Chi Minh City offices, where he served as managing director from 2007 to 2010.
John is a US-licensed attorney, and a founding member of the Thailand branch of the Chartered Institute of Arbitrators. He earned his Juris Doctor (JD) with high distinction (magna cum laude and Order of the Coif) from the University of Minnesota, and he practiced banking and finance law at Leonard, Street & Deinard, a leading U.S. law firm, prior to joining Tilleke & Gibbins.
DYAN DANIKA LIM
Dyan Danika Lim (BS, JD) specialises in energy, gas, oil, telecommunications & public utilities litigation and alternative dispute resolution with a particular interest in domestic and international arbitration and cross border litigation. She also handles product liability cases. She is currently an Associate Solicitor at the Office of the Solicitor General of the Philippines and a Professor at the De La Salle University, College of Law. Prior to joining the government, she worked as a Senior Associate at the Litigation and Dispute Resolution department of the Angara Abello Concepcion Regala & Cruz Law Offices. She is a member of the UP Women Lawyer’s Circle and the Young International Arbitration Group.
LIM CHEE WEE
Chee Wee graduated from the University of New South Wales in Australia with LLB and BComm (Accounting) degrees. He was called to the Malaysian Bar as an Advocate and Solicitor in the High Court of Malaya in 1993 and started practising in SKRINE, where he became a partner in 2001. Chee Wee is the immediate past president of the Malaysian Bar.
Chee Wee has a broad commercial practice. He also has an established public and administrative law practice, having regularly advised and acted as Counsel for the Malaysian stock exchange and another regulator. His other areas of practice encompass banking, construction and engineering, land law, reinsurance, trusts and partnership disputes. He is listed in various international legal directories as a leading individual for dispute resolution.
LY TAYSENG
Managing Director of HBS Law, Attorney-at-law and Member of the Council of Jurists of the Council of Ministers of the Royal Government of Cambodia
NG HUI MIN
Ng Hui Min is a partner in Rodyk & Davidson LLP’s Litigation & Arbitration Practice Group. Hui Min graduated from National University of Singapore in 2006 and was admitted to the Singapore Bar as an Advocate & Solicitor in Singapore in May 2007. Hui Min is effectively bilingual in English and Chinese, and her main areas of practice encompass commercial litigation, corporate and investment disputes litigation, insolvency cases and employment disputes. She represents and advises companies and individuals on a wide array of commercial issues including commodities disputes, international sale of goods, directors’ duties, and shareholders’ disputes.
In her practice, Hui Min has represented companies on contractual disputes in the oil and gas industry as well as in the commodities industry where she has dealt with issues ranging from breach of warranty to claims under guarantees. Hui Min has also acted for companies in international arbitrations with respect to claims associated with international trade including commodities disputes. Hui Min has also acted for a variety of clients in employment matters, and possesses particular expertise in the area of confidentiality and restrictive covenants. In her insolvency practice, Hui Min has advised and acted for shareholders of companies where she has dealt with issues which include directors’ breach of fiduciary duties and deadlock between directors leading to a winding up of companies.
LUKE NOTTAGE
Dr Luke Nottage specialises in contract law, consumer product safety law, corporate governance and international arbitration, with a particular interest in the Asia-Pacific region. He is Professor of Comparative and Transnational Business Law at Sydney Law School, founding Co-Director of the Australian Network for Japanese Law (sydney.edu.au/law/anjel), and Associate Director of the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS). Luke’s 11 books include International Arbitration in Australia (Federation Press, 2010), and Foreign Investment and Dispute Resolution Law and Practice in Asia (Routledge, 2011). He is an ACICA Special Associate and founding member of the Rules drafting committee, the Australasian Forum for International Arbitration council’s Japan Representative, and on the panel of arbitrators for the BAC, JCAA, KCAB and KLRCA. Luke has also consulted for law firms world-wide, ASEAN, the EC, OECD, UNCTAD, UNDP and the Japanese government, and is Managing Director of Japanese Law Links Pty Ltd (www.japaneselawlinks.com).
COLIN ONG
Dr Colin Ong is a practising member of the Brunei, English and Singapore Bars. He has acted as arbitrator or as counsel in many commercial and investment arbitrations under most major rules of arbitration governed under Civil and Common Law. He is a Chartered Arbitrator and a Master of the Bench of the Inner Temple. He is or has been a Visiting Professor at various universities, including the University of Hong Kong; Universitas Indonesia; King’s College (University of London); University of Malaya; Universiti Kebangsaan Malaysia; Universitas Indonesia; Queen Mary (University of London); Padjadjaran University (Indonesia); and National University of Singapore. He is the author of several arbitration and law books and is an editorial board member of various legal journals including Arbitration (CIArb); Business Law International; Butterworths Journal of International Banking & Financial Law; Dispute Resolution International; and Maritime Risk International.
He currently holds various positions including President, Arbitration Association Brunei Darussalam; Advisory Board, BANI (Indonesia); Board, Cambodia National Commercial Arbitration Centre; Advisor to China-ASEAN Legal Research Center; ICC Commission on Arbitration; and ICCA-Queen Mary Task Force (Costs and Security for Costs). He was a Former Principal Legal Consultant, ASEAN Centre for Energy; Panel Member (Brunei Darussalam nominee) of the ASEAN Protocol on Enhanced Dispute Settlement Mechanism; and Former Vice President of the LCIA (Asia-Pacific Users’ Committee).
PATRICIA-ANN T PRODIGALIDAD
Patricia-Ann T Prodigalidad (BS, LLB, LLM) is a Partner of the Litigation and Dispute Resolution Department of Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW). Ms Prodigalidad specializes primarily in commercial litigation (intra-corporate disputes; banking, investments and securities litigation; corporate rehabilitation and insolvency) and criminal matters relating to corporate activity (including white collar and other business-related crimes; anti-money laundering; anti-corruption and other FCPA issues), with particular focus on cross-border issues. She likewise practices extensively in the fields of international commercial and construction arbitration as well as product liability and antitrust litigation. Ms Prodigalidad also acts as an arbitrator in international commercial and domestic arbitration, both institutional and ad hoc. In 2013, Ms Prodigalidad passed the Fédéracion Internationale Des Ingénieurs-Conseils [FIDIC] Dispute Board Adjudicator Assessment Workshop sponsored by FIDIC and the Japanese International Cooperation Agency and was one of four (4) Philippine delegates accredited as a dispute board adjudicator. Leveraging on her science degree, Ms. Prodigalidad has successfully handled environmental law cases.
Ms Prodigalidad, a prolific author, obtained her Bachelor of Laws degree from the University of the Philippines, cum laude, graduating class salutatorian. She then topped (ranked 1st in) the 1996 Philippine Bar Examinations. In 2004, she obtained her master’s degree in law from the Harvard Law School. Ms. Prodigalidad is a member of various professional domestic and international organizations and serves as trustee of the Philippine Dispute Resolution Center, Inc, the UP Women Lawyers’ Circle and Harvard Law School Alumni Association. She is currently the National Secretary of the Integrated Bar of the Philippines, the countrywide organization of all lawyers in the Philippines.
LAWRENCE TEH
Lawrence Teh is a partner in Rodyk & Davidson LLP’s Litigation & Arbitration Practice Group. Lawrence advises clients and acts as an advocate in all areas of commercial law and appears regularly as leading counsel in the Singapore Courts, in arbitration and in other forms of dispute resolution. He is also appointed regularly as an arbitrator in international disputes. He has particular experience in international trade and commodities, maritime and aviation, banking and financial services, onshore and offshore construction, mergers acquisitions joint ventures and other investments, and insurance in related fields.
Lawrence is currently the Chairman of the Alternative Dispute Resolution (ADR) Committee at The Law Society of Singapore. He is a Fellow of the Chartered Institute of Arbitrators, a Fellow of the Singapore Institute of Arbitrators, and a panel arbitrator at the Singapore International Arbitration Centre. He chaired the committee that drafted the Law Society Arbitration Rules and is a panel arbitrator of the Law Society Arbitration Scheme. Recently, he was appointed the Administrator of the Comite Maritime International (CMI) in 2013, and Chairman of the Promotion Committee of the Singapore Chamber of Maritime Arbitration (SCMA). He is also a Council Member of the Legal Practice Division in the International Bar Association (IBA). He is named in numerous legal guides and directories including the Asia Pacific Legal 500, International Who’s Who for Commercial Litigation, International Who’s Who of Shipping & Maritime, Asialaw Leading Lawyers for Shipping, Maritime & Aviation and on the Guide to the World’s Leading Aviation Lawyers.
SAKDA THANITCUL
Dr Sakda Thanitcul is Professor of Law at the Faculty of Law, Chulalongkorn University, in Bangkok. He earned his LLB from Chulalongkorn University, LLM and PhD (Law) from University of Washington School of Law and also LLM and LLD from Kyoto University. He was a member of the advisory team to the chief negotiators of the US-Thailand FTA and the Japan-Thailand Economic Partnership Agreement. His recent publications include “Thailand
(co-author with R. Ian McEwin) in Mark Williams (ed), The Political Economy of Competition Law in Asia (Hart Publishing, 2011), pp 279-291, “Thailand” (co-author with R Ian McEwin) in Mark Williams (ed.), The Political Economy of Competition Law in Asia (Edward Elgar, 2013), pp 251-282, “Compulsory licensing of chronic disease pharmaceuticals in Thailand” (co-author with Matthew L Braslow), (2014) 37(3) Thai Journal of Pharmaceutical Sciences 106-120.
TU NGOC TRINH
Tu Ngoc Trinh is a licensed attorney in Vietnam and a member of the Tilleke & Gibbins corporate & commercial team in the firm’s Hanoi office. Her practice focuses on the life sciences sector as well as general corporate matters including company formation, employment, franchise activities, commercial transactions, and mergers and acquisitions. Tu is committed to helping her clients achieve sustainable success in Vietnam. She is a member of the Hanoi Bar Association and the Vietnam Bar Federation.

Free Trade (Agreements) Enhancing Consumer Protection in Southeast Asia

[A version of this posting appears on the East Asia Forum blog.]
Those opposed nowadays to greater economic integration through the WTO or free trade agreements typically assume that this will undermine consumer protection, especially due to more unsafe goods coming into local markets. But as David Vogel documented in the mid-1990s for the US, we often find “trading up” to higher safety standards. Partly this is because exporters may need to improve safety features to comply with requirements set by public or private law in the destination country. It is then often inefficient to remove such features for products also sold into local markets, where requirements may initially be lower, or if features are removed consumers and regulators in local markets will more readily press for local safety standards to be raised.
FTAs and other international agreements can also facilitate enactment of better consumer product safety laws. The EU was an early example. In 1979, the Treaty of Rome was interpreted to require “mutual recognition”: goods produced to safety standards required in one EU country would be deemed to satisfy standards in an importing country. But to avoid a “regulatory race to the bottom”, the EU also developed a new and more effective approach to setting joint minimum safety standards.
Intriguingly, Southeast Asia is experiencing similar developments. …

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Developing ASEAN Recall Guidelines for Consumer Products

[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.]
1. Introduction
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.

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Cosmetics regulation under national and ASEAN law

[The following is a longer and un-footnoted draft of a fifth Policy Digest prepared for a Sydney Southeast Asia Centre joint research project and an ASEAN Secretariat project on harmonising consumer protection law. It is highly relevant also to Japan in light of Kanebo’s large-scale recall of some of its skin-whitening products across the region as well as in Japan in 2013.]
1. Introduction
Consumer goods associated with higher risks, and often also extent of harm, tend to generate public regulatory interventions. Food is one example, for which nation states have often legislation quite early on. However, national legislation and implementation is increasingly impacted by international law, particularly World Trade Organization (WTO) or bilateral and regional free trade agreements agreements insist that food safety measures be based on rational and proportionate public health risk assessments, and not constitute disguised trade barriers. This is facilitated by such agreements expressly stating such requirements will be presumed to be satisfied if the national measures are based on food standards agreed in the Codex Alimentarius, administered by two United Nations bodies. The Codex process has remained relatively unpoliticised, based instead on scientific risk assessments, partly because most countries both export and import foods but also because food is a necessity for everyone. This backdrop has also made it easier for other international and regional bodies, including ASEAN and APEC, to collaborate with national regulators and the private sector to develop shared food safety standards in Southeast Asia and world-wide.
Pharmaceuticals and, more recently and in a less interventionist way, cosmetics (goods without, necessarily, any medicinal properties) have also tended to generate regulatory regimes at the national level. At the international level, however, the WTO’s 1994 Technical Barriers to Trade (TBT) Agreement does not expressly create a presumption of conformity from adhering to standards set by specified bodies, when national regulators introduce measures applicable to imports. There is no counterpart to the Codex process; different countries and regions maintain more disparate approaches to assessing and regulating non-food sectors, partly because they may not be exporting as much as importing certain types of goods.
Overall, moreover, the United States (US) often adopts more lenient regulatory regimes compared to the European Union (EU). This is particularly noticeable with respect to cosmetics: the US relies much more on voluntary industry self-regulation (plus more threat of private lawsuits for product liability), whereas the EU favours more interventionist public regulation. Nonetheless, the EU’s 1976 Cosmetics Directive aimed to balance consumer protection with harmonized standards to facilitate cross-border trade, especially within and into Europe. Because the regulatory regime remains stricter than in the US, and EU’s cosmetics manufacturers are more likely to sell into the more regulated European markets than American manufacturers, the EU can also support European manufacturers by encouraging countries and regions in other parts of the world to “trade up” to the EU rather than laxer US regulatory approach, when developing their own laws and practices. Already, by 2004, the lists of ingredients set under the 1976 EU Cosmetics Directive had been adopted by 30 countries, including countries in South America party to the Mercosur and Andean Pact regional arrangements. Other countries, including China and India, have reproduced significant features of the EU model.
Furthermore, although this is not widely known, the EU model has been adopted in Southeast Asia through the “Agreement on the ASEAN Harmonized Cosmetics Regulatory Scheme”. This was signed in 2003 to advance the ASEAN Free Trade Area program, albeit also against the backdrop of the WTO’s TBT Agreement. Schedule A creates the ASEAN Mutual Recognition Arrangement of Product Registration Approvals for Cosmetics, allowing individual ASEAN Member States (AMSs) to agree with other AMSs to allow, without further requirements, the import of products that satisfy the regulatory requirements of the other state(s). However, any such mutual recognition agreements (anyway possible under the TBT Agreement) were envisaged as a temporary step towards harmonizing cosmetics regulation in the region. More importantly, under the 2003 Agreement (Art 2(3)) the AMSs committed to implement by 1 January 2008 the “ASEAN Cosmetics Directive” (ACD) set out in Schedule B. This closely tracks the EU Directive, including by requiring the AMSs to “adopt the Cosmetics Ingredients Listings of the EU Cosmetics Directive 76/768/EEC including the latest amendments”. Supported by the ASEAN-EU Programme for Regional Integration Support, by early 2008 six AMSs had started implementing the ASEAN Directive into their national laws, followed by Thailand, Cambodia, Laos and Myanmar a year and half later, and finally Indonesia from 2013. The ACD regime has therefore been described as “one of the first concrete instances of economic integration between ASEAN countries”.
Meanwhile, however, the EU itself replaced its Directive in 2009 with a Cosmetics Regulation, which on 11 July 2013 came into direct effect in the (now 27) EU member states, rather than having to be implemented by national legislation – sometimes not straightforwardly – as occurs when harmonisation is attempted by means of a Directive. The EU Regulation similarly attempts to enhance cross-border trade through harmonisation, expanding consumer choice while respecting public health, for example by adding new requirements to label cosmetics (such as suncreens) that include nano-particles.
Part 2 below therefore takes a closer link at key features of the ACD, including some differences that remain compared to the original EU model (and especially the US regulatory regime), as well as implementation and other challenges. As elaborated in Part 3, as well as various concrete improvements that could be made to this approach for harmonizing consumer product safety law, the model might eventually be extended to other sectors and anyway is relevant to general consumer regulators, even if the primary jurisdiction over cosmetics usually remains with health officials.

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Food Safety Regulation under National and International Law: Integrating Consumer Regulators in Proliferating Standardisation Projects

[The following is a longer and un-footnoted draft of a fourth Policy Digest prepared for a Sydney Southeast Asia Centre joint research project and an ASEAN Secretariat project on harmonising consumer protection law.]
1. Introduction
Public regulation of food safety is typically an early and major priority for law reformers at the national level, given potentially high risks and degrees of harm from unsafe foods. For products that present lower risks, for which it is more difficult to mobilize political resources to regulate, product liability regimes can also incentivise manufacturers to consider food safety – especially if potential harm is extensive, liability is strict, and court systems work effectively. Further incentives can come from reputational effects, in the context of growing (social) media coverage of food safety concerns. Nonetheless, as outlined in Part 2 below, serious food safety failures continue to occur in both developing and developed countries.
General food laws have been enacted in ASEAN Member States (AMSs). As shown in a recent comparison of Indonesia, Malaysia, Thailand and Singapore, they generally impose criminal and/or administrative sanctions for food adulteration, foods injurious to health, food unfit for human consumption, insanitary facilities, and false labeling or deceptive advertising. (Indonesia’s Food Act 1996 further provides specific civil remedies for consumers harmed by unsafe food.) Yet enforcement is problematic: “Food quality and safety standards are usually strictly followed for exportable food commodities, but not always enforced for food destined for the domestic market”.
In addition, such food laws tend to fall under the jurisdiction of ministries of agriculture and/or health. To minimize conflicts of interest, namely agriculture ministries favouring suppliers rather than consumers, there is a tendency to establish independent food agencies, as in the United States (US, although the agriculture department still regulates some products) or Myanmar (within the Health Ministry). This is especially true for risk assessment functions, as in the European Union (EU) since 2002, and Japan since 2003 (for risk management if harm eventuates, Japan’s agriculture ministry still regulates farm safety while the health ministry deals with the subsequent supply chain).
However, other government departments are also increasingly involved in food safety regulation. On the one hand, ministries of commerce or trade get involved because international treaties now require science-based, proportionate regulation of import safety, preferably based on internationally agreed standards, as outlined in Part 3 below. On the other hand, there is existing and potential scope for consumer affairs regulators to become (more) involved in food safety regulation, even though they may constitute smaller and more recently created public authorities, because:
• they often have or share responsibility for enforcing food standards set by other departments (as seen in the Consumer Protection Laws enacted in Vietnam in 2010 and Myanmar in 2013);
• consumer regulators may also be given a coordinating role, or “back-up” powers to regulate if a harmful food product falls outside the jurisdiction of other agencies (eg konnyaku jelly snacks in Japan until the Consumer Affairs Agency was established in 2009);
• consumer regulators may have powers to bring representative actions (as in Thailand) or order compensation (as in Myanmar) on behalf of consumers harmed by non-compliant foods.
Consumer regulators also develop helpful expertise in consumer behaviour and risk communication more generally, which is valuable for law-making related also to food nutrition (i.e. “healthy eating”) – a broader contemporary policy concern than food safety (i.e. avoiding food-borne illnesses). As explained by the Consumers International regional representative at the inaugural ASEAN Consumer Protection Conference, held in Vietnam over 8-9 November 2014, promoting healthy diets is a priority because adverse health effects associated with obesity are now spreading to Southeast Asia. In addition, consumer regulators can assist other government authorities in developing effective schemes for oversight of “food safety auditing” by private inspectors, already widely used in global food supply chains and likely to be further facilitated through international agreements on trade in services, yet potentially creating conflicts of interests for the auditors which may impact adversely on consumers.
Accordingly, there is a need to expand capacity in food-related health issues among consumer regulators in AMSs. They need enhanced opportunities to engage with other national regulators (with shared or primary responsibility for food safety regulation) as well as the growing numbers of international, inter-governmental or public-private partnership organisations involved in generating shared food safety standards in the region. This is especially important given that the ASEAN Economic Community (AEC) project, promoting free trade in goods and services by 2015, includes harmonisation of agri-food standards as a priority action item (as elaborated in Part 3).

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Product Safety and Product Liability Laws in ASEAN

Chulalongkorn University’s ASEAN Studies Centre will sponsor this major international conference in Bangkok over 28-29 July 2015, with collaboration from and at the downtown venue of the Department of International Trade Promotion within Thailand’s Ministry of Commerce. The key organiser is the immediate past Dean of Law at Chula, Prof Sakda Thanitcul, assisted by Prof Luke Nottage, immediate past Associate Dean (International) at the University of Sydney Law School and a visiting professor at Chula for parts of 2015. Other speakers include Professor Geraint Howells, renowned consumer product safety law expert and presently Dean of Law at the City University of Hong Kong, as well as the following other country reporters:
1. Singapore: Mr. Lawrence Teh (lawrence.teh@rodyk.com)
2. Vietnam: Mr. Anh Thi Phuong Pham (phuonganh.p@tilleke.com)
3. Cambodia: Mr. Ly Tayseng (tayseng@hbslaw.asia)
4. Laos: Mr. Sornpheth Douangdy (Sornpheth.douangdy@la.pwc.com)
5. Myanmar: Prof. Dr. Khin Mar Yee (dr.khinmaryee.ygn@gmail.com)
6. Malaysia: Mr. Lim Chee Wee (lcw@skrine.com)
7. Indonesia: Mr. Riza Buditomo (Riza.Fadhli.Buditomo@bakernet.com)
8. Philippines: Prof. Emmanuel Lombos (emlombos@syciplaw.com)
9. Brunei: Prof. Dr. Colin Ong (onglegal@gmail.com)
Country reporters will summarise key features in their respective jurisdictions, elaborating eg from Jocelyn Kellam (ed) Product Liability in the Asia-Pacific (3rd ed 2009), but focus on new developments in private law, public regulation, enforcement and media coverage of product safety issues. The conference also draws on my research for a smaller project, focusing on free trade agreement aspects, for the Sydney Southeast Asia Centre.

Continue reading “Product Safety and Product Liability Laws in ASEAN”