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Protecting consumers in a globalised world: time for a global approach to product safety?

Ahead of a new survey on product safety that will be launched this week, Consumers International’s Director General Amanda Long looks at some of the challenges facing those who want to keep consumers safe in a globalised world.

Product safety is something we don’t necessarily notice or appreciate until it fails. Headlines of exploding phones or faulty white goods are familiar across the world, at times with lethal consequences. But with existing product safety frameworks creaking under the pressure of globalisation and digitalisation, are we set to see more and more accidents hitting the headlines?

The safety of the things we buy is essential for all consumers, yet ensuring this requires legislation, regulation and enforcement. And while the right to safe products is recognised globally and incorporated into most legal frameworks, the substance and shape of these vary from region to region and country to country.

These differences highlight that national governments have traditionally taken the initiative in protecting their own citizens. But what happens when consumers don’t live where their products are made? Or the products themselves have been assembled from parts designed and constructed elsewhere? Which product safety frameworks apply and where can consumers seek redress if something goes wrong?

Dangerous products in a globalised world

The challenges of a global supply chain are becoming ever more apparent to consumers and governments alike. The increasingly contentious issue of car manufacture illustrates this phenomenon perfectly, with most models boasting an international array of parts before they are even assembled. When something goes wrong, it means the consequences can spread far and wide. Which is what happened earlier this year, when it was revealed untested or below standard steel from Kobe in Japan may have been used by around 500 companies worldwide, including large car manufacturers like Toyota and General Motors. An internal report by Kobe Steel has condemned a culture which prioritised short-term profits over safety standards, with an external report on the scandal due by the end of December.

The situation is further complicated by inconsistencies in product safety standards between countries. The Nissan Tsuru was responsible for over 4,000 deaths in Mexico between 2007 and 2012 and received a zero star safety review in Global NCAP and Latin NCAP tests - a crash test between the cheapest Nissan sold in the US and a Tsuru shows why. After a strong campaign by consumer organisations and the Latin NCAP, Nissan agreed to stop production of the Tsuru by May 2017. The huge disparity in standards applied by the same manufacturer for different markets only strengthens the case for a global approach to product safety.

E-commerce is another example. With every seventh online purchase a cross-border transaction, enforcing common mechanisms like product recalls confounds most regulators. This international maze of transactions and purchases becomes even more complicated when the popularity of independent reselling through platforms like eBay is factored into the equation. An OECD report found that 68% of the products they inspected appeared to be banned and recalled products available for sale online.

Rapid response when things go wrong

So, what is being done to solve this problem? A popular route has been the introduction of rapid alert systems for non-food items. The Organisation of American States introduced the Inter-American Rapid Alerts System (SIAR) in 2014, which includes most countries in the Americas and the Caribbean and over 980 million consumers. The Product Safety Incident Information Sharing System (PSIIS) run by Asia-Pacific Economic Cooperation similarly aims to develop an information sharing web portal among countries in the region, which would facilitate product recalls and the harmonisation of standards.

Likewise, the EU has its own rapid alert systems in place, with the RAPEX system enabling the daily exchange of information about consumer products between 31 European countries. In recognition of the international challenges involved in countering unsafe products, the European Commission also has a process for informing Chinese authorities when a RAPEX alert goes out about a product of Chinese origin.

Spanning different regions, the OECD collates information on product recalls from around the world in its GlobalRecalls portal, where consumers can check for safety alerts about products they intend to buy, regardless of where they are produced or sold. Running since 2012, this portal has helped businesses and governments navigate the difficulties of a global marketplace and protect consumers.

Consumer safety in the connected world

While these regional and international rapid alert systems have done a lot to help consumer safety keep pace with globalisation, the digitalisation of society and the economy is further testing existing product safety systems. Digital items are stretching current definitions of product safety, with the spread of ‘smart’ devices among the most pressing of these new challenges.

A telling example came earlier this year, when a completely unsecured ‘smart’ doll was banned by the German government. Rather than utilising traditional product safety routes, the telecommunications watchdog had to resort to a statute outlawing disguised surveillance devices. Classing the doll as ‘illegal espionage apparatus’ meant that owners were required to destroy the doll themselves, rather than return the product to a supplier. Whilst this action addressed important concerns regarding the privacy of children, if product safety frameworks do not adapt to the changing nature of products, consumers may end up losing out again.

The connected nature of ‘Internet of Things’ items also subverts the current relationship between producer and consumer. The point of purchase is no longer a convenient point where some level of producer responsibility can be retracted; without regular and continuous updates connected items can quickly become vulnerable to hacking or malfunction. This is particularly true of older models, which are more likely to be resold online or to lower income countries but less likely to receive updates from suppliers.

Going forward, product safety directives need to be updated to take ‘Internet of Things’ technology and products into account. As national and regional regulators grapple with these updates, it’s the perfect opportunity to rethink understandings of liability and systems of redress with the digital world in mind. BEUC have been taking this approach, urging the EU to adapt their product safety and product liability rules with digital products and services in mind.

What globalisation and digitalisation both demonstrate is the challenge of keeping products, and by extension consumers, safe in a modern marketplace. The need for broader, more innovative and consistently enforced product safety frameworks is clear, as is the need for cooperation across countries and sectors to bring about this change. The alternative is a marketplace that, though ‘smarter’ and more diverse, is ultimately less safe for consumers.