Overview of Consumer Law in LAC
The Broad Influences
If you had looked around LAC in the early 1980s, you would have been hard pressed to find a country with a framework consumer protection law, code, statute or regulation (I believe only Colombia had a simple one). Yes, many had market authorization laws, regulations, Sanitary Codes or special product -based codes or labeling rules on food, medicines and cosmetics that had as one of their purposes protection of the health and safety of consumers, but no broad framework governing most, if not all, consumer goods and services.
Ten years later, maybe a dozen had one. Today all but a handful do. What changed?
Well, if you wish you can attribute it to all sorts of socioeconomic factors — rise of the fast-consumption society, increased consumer awareness, mass media age, the internet, etc.
I tend to see it more as a function of a steady push by intergovernmental and nongovernmental organizations to get governments to act on this area. Bear with me and you'll see what I mean.
- The UN Guidelines on Consumer Protection
Most of the region's consumer protection laws have been proposed and adopted since the United Nations General Assembly (UNGA) in 1985 approved by consensus the "Guidelines for Consumer Protection." These Guidelines were amended/expanded in 1999 (English, Spanish, French) to incorporate principles on "sustainable consumption." [A bit of UN trivia: which country's UN delegation championed the original version of the Guidelines and ensured that they made it to UNGA endorsement? Answer: Venezuela.]
Due to the opposition of certain parties during the negotiations (take a guess which!), the Guidelines do not refer to "rights" so much as seven "legitimate needs" that consumer protection rules should address (see box). These were formulated in very terse and general terms so that each of the UN member states could embellish on them as they saw fit.
After the first version of the Guidelines were approved, the UN sponsored some regional consultations and workshops on consumer policy in LAC in which the Guidelines were promoted as a template for national laws. For its part, Consumers International (CI) — then known as the International Organization of Consumers Unions (IOCU) — and its LAC affiliates promoted the Guidelines as a minimum — a foundation on which to build, rather than a ceiling to limit the content and scope of national consumer laws.
Some of the post-1985 bills to create consumer protection laws in LAC explicitly cited the UN Guidelines. But even in LAC nations that do not openly acknowledge the Guidelines' influence, officials will privately admit that the Guidelines and some of the follow-up regional education/ cooperation efforts did shape the drafting of their laws.
- Parlatino's Model Law
Whereas the UN Guidelines were the model/influence for many of first generation consumer protection measures across the region, the "model framework law" (Spanish. Portuguese) approved last year by the Latin American Parliament ("Parlatino") may influence the next generation of legislative activity in the Spanish and Portuguese speaking nations — the reforms, amendments, enhancements and fine-tuning many national laws appear poised to undergo in the next few years.
The São Paulo-based Parlatino is a several decades old* institution designed to promote cooperation and exchange of ideas among Latin American legislators. Its members include Brazil and all the Spanish-speaking nations of the region, plus Suriname, Aruba and the Netherlands Antilles. Parlatino operates via theme-based commissions, including one on consumer protection. These commissions try to develop a consensus on many of the topical issues of the day in their national legislatures, and often draft model laws the legislators can take home to use as guide in legislative proposals.
Parlatino's User and Consumer Defense Commission first approved a model framework for national consumer codes as early as 1997. That model code was ghost-drafted by CI, based in part on the UN Guidelines and Brazil's Consumer Code. The 1997 model was shopped around several national legislatures in the late 1990s, and pieces of it ended up in several bills proposed and later adopted.
The May 2006 model law, far more detailed and sweeping, is already making the rounds of national legislatures in LAC.
- Caricom's Consumer Protection Protocol
You may have noticed that the English-speaking Caribbean does not participate in Parlatino. For these nations, the greater influence is likely to be Part VI (Consumer Protection) of Protocol VIII of the Treaty Creating the Caribbean Community (Caricom). The Protocol was signed by 12 Caricom member states but only ratified by one (Guyana), but was then rolled into the revised Treaty of Chaguaramas creating the Caribbean Single Market and Economy (CSME). The revised Treaty and its Protocols finally came into effect in 2006 after several years of provisional application.
The Protocol not only outlines what items should be protected under "harmonized legislation" (implying that some work toward harmonization is likely) enacted by Community member states (see box — click to enlarge), but also calls on the Community Commission to promote consumer education, propose quality standards for consumer products, promote the elaboration and adoption of fair contract terms, but also to
(b) take such measures as it considers necessary to ensure that Member States discourage and eliminate unfair trading practices, including misleading or deceptive conduct, false advertising, bait advertising, referral selling and pyramid selling;
(l) make recommendations to the COTED for the enactment of legislation by the Member States for the effective enforcement of the rights of consumers.
It was anticipation of such a lead role by Caricom in consumer affairs that led consumer groups in 2005 to form a special "Caribbean Consumer Council" to lobby Caricom on consumer issues.
- MERCOSUR Efforts to Create a Consumer Dimension
As I mentioned in the article on MERCOSUR's recent measure on deceptive advertising, despite an early resolve to create a comprehensive regulation on consumer protection, the common market instead ended out tackling consumer issues piecemeal over the years, with measures on advertising and contractual guarantees. It could also be argued, however, that protecting the consumer was frequently invoked in the MERCOSUR work programs on health and safety aspects of cosmetics, food, pharmaceuticals, personal care products and cleaning products (more on this work in a future Temas Blog entry).
In 2000 MERCOSUR decided to formally declare consumer protection a MERCOSUR priority, but did so through the curious vehicle of a "Presidential Declaration on Fundamental Rights of MERCOSUR Consumers" instead of a Protocol, Decision or Resolution. The Declaration listed 11 rights (click on box at right to enlarge) — although it can be argued that #6 can/should be divided into two, one on consumer education, the other on consumer entities — that should guide MERCOSUR work and national law of of MERCOSUR member states.
Has this resulted in a flood of new MERCOSUR initiatives on consumer protection or a fundamental rewrite of member state consumer laws to reflect the Declaration? Not yet, even though a work group on consumer protection ("Technical Committee No. 7") was created and it has worked on such diverse issues as e-commerce, abusive contract clauses and timeshares. But as I noted in the prior post on advertising, recently MERCOSUR has increased its work on consumer-related issues and there are legislative proposals in some member states to revise existing consumer law, so stay tuned.
- Other Regional Actors?
The attorneys-general of the member states** of the Organization of Eastern Caribbean States (OECS) recently have met several times to compare notes and try to develop similar drafts of consumer protection framework laws to submit to their parliaments.
Although they might claim consumer protection as one of their aims, Andean Community's (CAN) does work on harmonizing member state rules on cosmetics and the Central American Integration System's (SICA) does work on food and pharmaceuticals that are really more about reducing technical barriers to trade. Neither body appears ready at the moment to dive deeper into consumer protection issues.
Consumer Provisions in Constitutions
Consumer protection provisions can be found in the following national and state/provincial constitutions:
Costa Rica (1949, as amended 1996)
El Salvador (1983, as last amended in 2000)
Panama (1972, as last amended in 2004)
The provisions are diverse. The Brazilian constitution simply declares that a law will set out consumer protection. At the other end of the scale, Venezuela's 1999 Constitution sets out a detailed list of consumer rights, and tasks the Defender of the People (a kind of national ombudsman) to defend those rights and get appropriate government agencies to punish violations.
Most of the other nation's constitutional provisions at a minimum call for the state to defend consumers against monopolies and abuses of a dominant position in the marketplace, and many speak of the right to "adequate and true information" about products and services and protecting against problems with product quality, health and safety.
Consumer Protection Framework Laws Among LAC States
By now, most nations in the region have some sort of national framework consumer protection law or code. The only countries still lacking them are Belize, Bolivia, Cuba, Grenada, Guyana, Haiti, Saint Lucia, St. Vincent and the Grenadines, and Suriname. Saint Lucia is currently considering a consumer protection act, in part to fulfill its commitment under Protocol VIII of the Treaty of Chaguaramas.
In the federal republic of Argentina and Brazil, some provinces/states also have their own consumer protection framework laws.
The existing framework laws/codes can be viewed/downloaded from the following links:
Antigua and Barbuda (1988)
Costa Rica (1994)
Dominican Republic (2005)
El Salvador (2005, replaces 1996 law)
Mexico (1992, last revised 2006)
Trinidad and Tobago (1986, as amended 1998)
Other Consumer Protection Legislation in LAC Nations
Setting aside for the moment sectoral legislation with consumer protection elements on cosmetics, detergents/cleaning agents, food and beverages, and pharmaceuticals (I plan separate posts and standalone pages on each in the near future), it is difficult to find much in way of the type of specialized consumer protection legislation on advertising/promotion, labeling, abusive contract clauses, guarantees, recalls, after-sales service and guarantees, doorstep sales, telemarketing, etc. that one may find in Europe or North America.
They do exist, however, in a handful of LAC nations on a handful of issues. These are:
- Abusive contract and contract clauses
- Home Sales
- Promotions and Offers
— Keith R
* Parlatino was originally formed as early as 1964 in Lima, but did get fully institutionalized and develop a significant profile until a 1987 treaty formalized its role and status.
** Antigua & Barbuda, Dominica, Grenada, Montserrat, St. Lucia, St. Kitts & Nevis, St. Vincent & the Grenadines. Anguilla and the British Virgin Islands are associate members.
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