©The Sun
(Used by permission)
by Josie M. Fernandez
Since the end of British colonial rule, the Malaysian government, as part of its
national development agenda, has given high priority to consumer welfare and
protection.
In the early years of independence, Malaysia's economy was primarily based on
agriculture. Seventy per cent of the population lived in rural areas and they
constituted a large number of the poor. Consumer welfare therefore focused on
providing basic needs such as shelter, food, access to water and sanitation,
health and education.
Early consumer protection laws such as The Price Control Act 1946 and the
Control of Supplies Act 1961 reflected the need to control prices and inflation,
and to ensure access to the bare necessities.
The government's modernisation programme, accompanied by capital intensive
economic development, began to take root in the 1970s. This pattern of
development changed the consumer demographics and led to the expansion of a
large urban–based middle class.
As incomes rose, there was also a corresponding and dramatic increase in the
consumption of goods and services. Consumers and businesses began treading new
ground where established norms and standards for goods and services were not
available.
Realising this, the government took several measures to protect consumers such
as introducing consumer protection statutes, enhancing institutional capacity to
ensure enforcement of consumer protection laws, and acknowledging the importance
of the United Nations Guidelines for Consumer Protection 1985. However, it is
the creation of the Domestic Trade and Consumer Affairs Ministry or MDTCA in
1990 that gave a major boost to consumer protection and welfare in Malaysia.
With half a ministry established to protect consumers, more human and financial
resources were made available to improve consumer welfare and protection in the
era of globalisation.
The Milestones
Some of the milestones in the development of consumer
protection and welfare in Malaysia in the last 50 years include:
Legislation and The Consumer Protection Act 1999
Before independence, some consumer protection laws such as the Price Control Act
1946 and the Medicines Act 1956 were introduced by the colonial government.
Since Merdeka, the government has recognised the need for specific enactments to
provide better consumer protection. Today, there are more than 30 statutes that
have elements of consumer protection incorporated into them.
Some of these statutes such as the Control of Supplies Act 1961, Hire Purchase
Act 1967, Trade Descriptions Act 1972 and the Direct Sales Act 1997 are enforced
by the MDTCA.
Many of these 30 statutes pertaining to the sale of goods and provision of
services were based on the caveat emptor principle which places the burden on
the consumer not to be cheated in any transaction.
To address these weaknesses, the government, after 15 years of lobbying by
consumer organisations, enacted a more comprehensive consumer protection
legislation. The Consumer Protection Act 1999 came into force on Nov 15, 1999.
National Consumer Policy
The government recognised that consumer policies needed to be
integrated with national development policies to improve quality of life.
The National Consumer Policy (NCP) was launched on July 26, 2002. The NCP's
focus is the formulation of national economic and social policies based on
enhancing consumer welfare and raising Malaysians' quality of life.
Redressal Mechanisms
The government has established a number of institutional
mechanisms for aggrieved consumers to seek redress:
• The Tribunal for Consumer Claims. This is the most active entity of the CPA
1999. The tribunal receives more than 5,000 claims annually.
• The Small Claims Court set up in 1987 which restricts claims to a maximum of
RM5,000.
• The industry–initiated Ombudsmen Schemes for Banking and Insurance for
example, the Financial Mediation Bureau.
• The Tribunal for Homebuyers Disputes.
Governance, Ethics and Self–Regulation
The government in the last four decades has also emphasised
that businesses have a social and moral responsibility to consumers inensuring
that consumers obtain fair and safe deals in the marketplace.
To this end, in addition to the many laws that govern businesses, the government
has promoted the practice of self–regulation within the business community
through the adoption of codes of practice and ethics for various businesses and
professional bodies. They are:
• the Malaysian Business Code of Ethics;
• the Malaysian Communications and Multimedia Content Code;
• the General Consumer Code of Practice for the Communications and Multimedia
Industry Malaysia;
• the Direct Selling Association of Malaysia Code of Conduct; and
• the Malaysian Code of Advertising Practice.
Recognition of Consumer Rights
Malaysia recognises the eight rights of consumers in the definition of consumer
protection and welfare. Malaysia is one of the few that celebrates a National
Consumer Day.
To mark the day, which falls on July 26, the MDTCA gives awards to effective
consumer organisations, school consumer clubs, consumer rights advocates and to
fair price companies.
Consumer Education
The most effective tool in consumer protection is consumer
education as it helps to develop skills to enable consumers to function as
socially–responsible consumers. The programmes for consumer education range from
the formal education system to non–formal channels.
In the Malaysian school syllabus, consumer–centred topics are incorporated into
various subjects. At the tertiary level, consumer law and consumer education are
offered as subjects.
Non–formal consumer education activities include the establishment of school
consumer clubs, seminars, and publications and multimedia material produced by
the MDTCA and consumer groups. Seventy per cent of secondary schools have set up
consumer clubs.
The Development of Consumer Organisations
In a newly independent nation, outside of labour issues,
citizens need avenues to articulate their concerns about the quality of their
daily lives.
One of the earliest forms of consumer organising in the country was the
establishment of rate–payers' associations in major towns which provided urban
services and public amenities.
The government recognised it needed to address growing consumer concerns in a
fast–urbanising nation. A two–page government circular issued on March 4, 1965
urged all state secretaries to involve district officers to form consumer
organisations. This resulted in the formation of the Selangor Consumers
Association (1965), the Consumers Association of Penang (1969), and the
Federation of Malaysian Consumer Associations (Fomca) (1973).
Today, there are 25 consumer associations, 14 of which are Fomca affiliates. The
government engages with consumer organisations on policy formulations, consumer
education activities and in addressing consumer concerns.
The Consumer Master Plan
In 2003, the government commissioned a Consumer Master Plan
for a 10–year period. Based on the principles of sustainable consumption and
development, the plan is aimed at achieving a consumer protection regime of
international standing if the complete set of recommendations are implemented.
Challenges
As we celebrate 50 years of independence from colonial rule,
Malaysian consumers face challenges from the increasing price of goods and
services to the effects of environmental degradation.
Successive economic policies have also resulted in economic disparities.
The privatisation of essential services such as health care and water without
adequate protection for economically–disadvantaged consumers sets back the clock
for consumer welfare achieved in half a century.
The world of consumption is different from 50 years ago. Both poor and rich
consumers face the impact of accelerating economic and cultural globalisation.
Consumers need to be protected in the new fields of information technology,
e–commerce, cross–border movements of financial services and global advertising,
and from dumping of unsafe products.
To address these challenges, the MDTCA must enhance its research capacity,
review laws such as the CPA 1999 which has significant loopholes, enact
appropriate legislation for product liability and e–commerce, protect personal
privacy and improve consumer education programmes.
Malaysia has achieved considerable success in enhancing consumer welfare and
protection in the last 50 years but much more is needed as the nation strives to
reach developed nation status by 2020.
Josie M. Fernandez, an Asian Public Intellectual Fellow, is a social
activist. She was founder president of ERA Consumer and a former member of the
National Consumer Advisory Council, and served as consultant to MDTCA.