UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT
Manual on Consumer Protection
United Nations UNCTAD/DITC/CPLP/2017/1/Corr.1
United Nations Conference 12 July 2018 on Trade and Development
English only
Manual on Consumer Protection
Corrigendum
Chapter XV, section B
Replace section B with the text below.
B. The nature of utilities provision
The conventionally defined utility industries, i.e. suppliers of water, sanitation, energy and communication services, among others, present special challenges for consumer protection. Not only do these industries provide very basic and essential services, but they also have particular economic characteristics that often make it difficult to open their services up for competition. There have been attempts within the European Union to redefine them as “services of general economic interest” (SGEI) characterized by identifiable public policy goals, such as universal service, leaving member states to specify the services included in the definition. The European Union approach is that SGEIs are subject to duties other than purely commercial ones, even though they may be run with a substantial commercial element and usually in return for payment. Such duties are summed up by the concept of public service obligations. A European Commission Eurostat publication explained in 2007: SGEIs can be defined as collective or social goods in the sense that they are different from ordinary services … Public authorities can lay down a number of specific obligations for the provider. The fulfilment of these obligations may trigger the granting of special or exclusive rights, or the provision for specific funding mechanisms. The classic case is the universal service obligation i.e. the obligation to provide a certain service throughout the territory at affordable tariffs and on similar quality conditions, irrespective of the profitability of individual operations.308
While the SGEI nomenclature has not spread much further afield, the concept remains widely accepted. Most utility industries rely on some sort of network to deliver their services. The economics of these fixed networks mean that it is cheaper for a single firm to supply an entire market than for several firms to do so. Once a distribution network is in place, it makes no economic sense to duplicate it by laying a second connection between the same points. The “natural
308 Eurostat, 2007, Consumers in Europe: Facts and Figures on Services of General Interest. UNCTAD/DITC/CPLP/2017/1/Corr.1 GE. 18-11469 (E)
UNCTAD/DITC/CPLP/2017/1/Corr.1
monopoly” produced by these distribution systems leaves consumers “tied in” to particular supply companies. However, this assumption is less valid now than a generation ago. Many aspects of natural monopoly are dissolving and since the move of telecommunications to mobile individualized service, it has become a competitive service with fewer network effects as its relatively inexpensive capital assets can overlap in the same territory. There are new issues about internet capacity which could recreate network problems in the future, and there remain issues of spectrum availability which are not explored here. But for most purposes, telephone services are competitive and subject to individual contracts which require supervision of a “fair trading” nature, checking for transparency, unfair contract terms and anti-competitive practices such as “lock in” contracts. Given the above, in this chapter we concentrate on water/sanitation and electricity.
2
United Nations UNCTAD/DITC/CPLP/2017/1/Corr.2
United Nations Conference 6 August 2018
on Trade and Development English only
Manual on Consumer Protection
Corrigendum
1. Page 80, paragraph 1
For (guidelines 36–43) read (Guidelines, para. 36) For guideline 44 read paragraph 37 of the Guidelines
2. Page 84, paragraph 4
For distributing damages read distributing compensation for damages
GE.18-12911 (E)
United Nations UNCTAD/DITC/CPLP/2017/1/Corr.3
United Nations Conference 30 January 2019 on Trade and Development
Arabic, English and Russian only
Manual on Consumer Protection
Corrigendum
1. Chapter XIII, box 15
Replace box 15 with the box below.
Box 15 From safe harbour to privacy shield
Among the 34 OECD member countries, 32 had implemented comprehensive data protection laws as of early 2016. At the time of writing, the Turkish parliament has passed a data protection bill that is meant to harmonize the Turkish regime with that of the European Union. That will leave the United States of America as the only exception (it uses a sectoral approach to data protection rather than a single law).
The European Commission’s Directive 95/46 on Data Protection, which took effect in 1998, prohibits the transfer of personal data to non-European Union countries that do not meet the European Union’s “adequacy” standard for privacy protection. The European Union requires other receiving countries to create independent government data protection agencies and to register databases with those agencies. In order to bridge the gap between their respective jurisdictions, in 2000 the United States of America and the European Union agreed the “Safe Harbour” framework, that certified businesses in the United States of America as meeting European Union requirements. Breach of the rules could trigger intervention by the United States of America FTC, which could in turn result in companies being struck off the approved list held by the United States of America Department of Commerce.
After a complaint from a European Union citizen that his data was not protected to European Union standards upon transfer to the United States of America, the European Court of Justice (ECJ) found in October 2015 that the presumption of adequacy under Safe Harbour principles did not prevent European Union citizens from challenging the initial 2000 Decision 520 on the basis of enforcing their personal rights and freedoms. Furthermore, the court actually invalidated the Safe Harbour adequacy decision which was found to have been adopted without sufficient limits to the access to personal data by governmental authorities. The court found that Safe Harbour did not ensure processing that was “strictly necessary” and “proportionate” as demanded by the European Union Data Protection Directive. As a result, Safe Harbour members no longer enjoy a presumption of adequacy that allowed for the movement of data from the European Union to the United States of America.
GE.19-01404 (E) UNCTAD/DITC/CPLP/2017/1/Corr.3
One important result of the case was the renegotiation of the Safe Harbour agreement, to be known henceforward as the European Union-United States Privacy Shield in February 2016. The new arrangement included a commitment to stronger enforcement and monitoring, including a new ombudsman and new limitations and conditions on surveillance. In April 2016, however, the grouping of European Data Protection authorities pointed to several deficiencies in the newly negotiated Privacy Shield despite it being seen as an improvement over the preceding Safe Harbour framework. The European Union’s advisory “Article 29 Working Party” asked for the European Commission to resolve their concerns in order to ensure that “the protection offered by the Privacy Shield is indeed essentially equivalent to that of the European Union”.273 Finally, following an “adequacy decision” by the European Commission regarding protection in the United States of America, the new Privacy Shield took effect on 1 August 2016. The Transatlantic Consumer Dialogue, whose members are consumer organizations from the United States of America and the European Union and have been persistent critics of Safe Harbour and the new Privacy Shield, has urged a relatively simple move which is that the United States of America could “become a full party, without undue reservations, to the Council of Europe Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data (CETS No. 108) and its Additional Protocol regarding supervisory authorities and trans-border data flows (CETS No. 181), which are both open to non- European states and provide the widest internationally agreed data protection standards”.274 Sources: UNCTAD, 2016, Study on Data Protection and International Data Flows; Trans-Atlantic Consumer Dialogue, Resolution on the European Union Privacy shield proposal, 7 April 2016; Susan Aaronson, The digital trade imbalance and its implications for Internet governance; Global Commission on Internet Governance, Chatham House, Paper 25, 2016; EC Press Release FAQs, 12 July 2016.
273 Article 29, Data Protection Working Party, 16/EN 238 Opinion 1/2016 on the European Union– United States Privacy Shield Draft Adequacy Decision, 13 April 2016, available at http://ec.europa.eu/justice/data-protection/index_en.htm. 274 Transatlantic Consumer Dialogue, 2016, Resolution on the EU–US Privacy Shield Proposal, 7 April.
2. Chapter XIII, box 16, third bullet
For the existing text substitute Trust networks: simplifying sharing choices through the creation of a network of accredited, trusted providers who commit to using consumer data on individual consumers’ terms.a a Citizens Advice, 2015, Personal Data Empowerment: Time for a Fairer Data Deal? Available at https://www.citizensadvice.org.uk/Global/Public/Corporate%20content/Publications/Person al%20data%20empowerment%20report.pdf.
3. Chapter XIV, box 19, Microcredit, first paragraph, last line
For informal settlements.11 read informal settlements.285 285 The Global Urbanist, 2010, Merry-go-round microfinance keeps slum residents fed in Kibera (13 April); Kenya English News, 2012, Merry-go-rounds become powerful investment tools in Kenya (16 June).
2 ii Manual on Consumer Protection
© 2017, United Nations
This work is available open access by complying with the Creative Commons licence created for intergovernmental organizations, available at http://creativecommons.org/licenses/by/3.0/igo/.
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UNCTAD/DITC/CPLP/2017/1 Preface iii
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Acknowledgements
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Consumer protection: An overview ...... 2 A. The rationale for consumer protection ...... 2 B. The concept of consumer rights and consumer protection law ...... 5 C. Who is the consumer and what is the consumer interest? ...... 6 D. Who is responsible for consumer protection? ...... 6 E. A framework for consumer protection ...... 7 F. Conclusion ...... 9 II. The United Nations Guidelines for Consumer Protection ...... 10 A. International instruments and consumer protection ...... 10 B. The United Nations Guidelines for Consumer Protection ...... 10 C. Conclusion ...... 16 III. Consumer law...... 17 A. Consumer law in the United Nations Guidelines for Consumer Protection ...... 17 B. Constitutional provisions on consumer protection ...... 17 C. Framework consumer protection laws ...... 18 D. Interface between consumer laws and other laws ...... 20 E. Conclusion ...... 23 IV. Consumer protection agencies ...... 24 A. Consumer protection agencies in the United Nations Guidelines for Consumer Protection ...... 24 B. Functions of consumer protection agencies ...... 24 C. Organizational models for consumer protection agencies ...... 24 D. The changing scope of consumer protection ...... 29 E. Conclusion ...... 29 V. Consumer associations...... 30 A. Consumer associations in the United Nations Guidelines for Consumer Protection .... 30 B. Consumer associations in the modern economy...... 30 C. The functions of consumer associations ...... 32 D. The independence of consumer associations ...... 33 E. The representativeness of consumer associations ...... 33 F. Conclusion ...... 35 VI. Business conduct ...... 36 A. Business conduct in the United Nations Guidelines for Consumer Protection ...... 36 B. Corporate social responsibility ...... 37 C. Self- and co-regulation ...... 41 D. Does collaboration work? ...... 44 E. Conclusion ...... 45 vi Manual on Consumer Protection VII. Competition law and the consumer interest ...... 46 A. Competition in the United Nations Guidelines for Consumer Protection ...... 46 B. Nature and characteristics of competition law and policy ...... 46 C. Competition law concepts ...... 47 D. Institutional architecture for competition...... 51 E. A challenge for competition policy coherence: consumer resistance to switching ...... 52 F. Conclusion ...... 53 VIII. International cooperation...... 54 A. International cooperation in the United Nations Guidelines for Consumer Protection ..54 B. Applicable law and jurisdiction...... 55 C. Practical international cooperation ...... 56 D. International institutional machinery ...... 57 E. Conclusion ...... 58 Part two Consumer protection in the marketplace ...... 59 IX. Product Safety and Liability ...... 60 A. Product safety in the United Nations Guidelines for Consumer Protection ...... 60 B. Product safety laws ...... 61 C. Product liability ...... 64 D. Services as dangerous products ...... 68 E. Product safety in international law and policy ...... 68 F. Second-hand goods ...... 70 G. Conclusion ...... 71 X. Consumer information and education ...... 72 A. Consumer information and education ...... 72 B. Consumer information and education in the United Nations Guidelines for Consumer Protection ...... 72 C. The transfer of risk ...... 72 D. Consumer information ...... 73 E. Critical issues with respect to labelling ...... 74 F. Critical issues with respect to advertising ...... 76 G. Consumer education and its implementation ...... 79 H. Conclusion ...... 82 XI. Consumer dispute resolution and redress ...... 83 A. Consumer dispute resolution and redress in the United Nations Guidelines for Consumer Protection ...... 83 B. The need for consumer dispute resolution and redress...... 83 C. Pathways for delivering consumer dispute resolution and redress ...... 83 D. Criteria for assessing consumer dispute resolution and redress systems ...... 88 E. Conclusion ...... 88 XII. Electronic commerce ...... 90 A. Electronic commerce in the United Nations Guidelines for Consumer Protection ...... 90 B. The scope and extent of e-commerce ...... 90 Contens vii C. Consumer trust in the digital market ...... 93 D. Guidelines from the Organisation for Economic Cooperation and Development ...... 95 E. Other international guidelines for the regulation of e-commerce ...... 97 F. Conclusion ...... 99 XIII. Privacy and data protection ...... 101 A. Privacy in the United Nations Guidelines for Consumer Protection ...... 101 B. Is privacy a right? ...... 101 C. Understanding the data dimension from a consumer perspective ...... 102 D. Regulating the digital age ...... 103 E. International regulation ...... 104 F. Can technology respond to the challenges that technology creates? ...... 105 G. Conclusion ...... 109 Part three Consumer protection and basic goods and services ...... 111 XIV. Financial services ...... 112 A. Financial services in the United Nations Guidelines for Consumer Protection ...... 112 B. Function and forms of consumer credit ...... 112 C. Function and forms of insurance ...... 116 ' $UHDVRIUHJXODWLRQIRUƄQDQFLDOVHUYLFHVDQGSURVSHFWVIRUUHIRUP ...... 116 E. Emerging issues ...... 121 F. Conclusion ...... 123 XV. Consumer protection in the provision of utilities...... 124 A. Public utilities in the United Nations Guidelines for Consumer Protection ...... 124 B. The nature of utilities provision ...... 124 C. Regulation ...... 125 D. Ownership ...... 125 E. The performance of public utilities ...... 127 F. Pricing and subsidies ...... 128 G. Access at the MDG/SDG interface ...... 130 H. Safeguarding the consumer interest ...... 130 I. Introducing competition in utility services ...... 131 J. Conclusion ...... 133 XVI. Food for all...... 134 A. The right to food ...... 134 B. Food in the United Nations Guidelines for Consumer Protection ...... 134 C. Malnutrition and food security ...... 134 D. Consumer concerns about food safety ...... 136 E. Food standards mechanisms ...... 136 F. Consumer concerns with genetic engineering ...... 136 G. Food legislation ...... 137 H. 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Consumer protection: An overview A. 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Strengths and weaknesses of self-regulatory systems and legislation Self-regulation Strengths: D 9ROXQWDU\FRGHVDUHƅH[LEOHHDVLHUWRFKDQJHWKDQODZVDQGFDQƄOOUHJXODWRU\JDSV E &RGHVFDQSURPRWHJRRGSUDFWLFHQRWMXVWSUHYHQWEDGSUDFWLFH F $QLQGXVWU\PD\LGHQWLI\PRUHFORVHO\ZLWKDFRGHLWKDVGUDIWHGLWVHOIDQGWKHUHIRUHPRUHUHDGLO\FRPSO\ G $FRGHFDQGHDOLQWXLWLYHO\ZLWKFXOWXUDOPDWWHUVVXFKDVWDVWHRUGHFHQF\ZKLFKDUHYHU\GLIƄFXOWWROHJLVODWHIRU H $FRGHLVH[SHFWHGWRJREH\RQGVLPSOHOHJDOFRPSOLDQFHDQGVRPD\EHPRUHLQQRYDWLYH I 5HGUHVVPD\EHFKHDSHUDQGIDVWHU J 7KHFRVWRILPSOHPHQWLQJDFRGHLVERUQHE\LQGXVWU\LWVHOI K 7HFKQLFDOH[SHUWLVHFDQHDVLO\EHEURXJKWWREHDUIURPWKHLQGXVWU\ Weaknesses: D $YROXQWDU\VFKHPHRQO\FRYHUVWKRVHZKRVLJQXSWRLW E $FRPSUHKHQVLYHVFKHPHPD\OHDGWRDQWLFRPSHWLWLYHEHKDYLRXU F 1RQPHPEHUVPD\XQGHUFXWVWDQGDUGV G 5HTXLUHPHQWVPD\QRWEHWDNHQVHULRXVO\LIQRWVWDWXWRU\ H $YDULHW\RIFRGHVPD\FRQIXVHFRQVXPHUV I 6DQFWLRQVPD\EHWRRZHDN UHOXFWDQFHWRGLVFLSOLQHSHHUV RUWRRVWURQJ H[SXOVLRQ J &RQVXPHUVPLJKWEHVFHSWLFDODERXWWKHIRUFHRIFRGHV K &RQƅLFWRILQWHUHVWPD\DULVHZLWKLQWUDGHDVVRFLDWLRQEHWZHHQUHSUHVHQWLQJPHPEHUVDQGXSKROGLQJVWDQGDUGV L &RGHVPD\EHFRPHEDUULHUVWRQHFHVVDU\OHJLVODWLRQ M &RGHVPD\EHLQDGHTXDWHO\PRQLWRUHG Legislation Strengths: D $XWKRULW\RIJRYHUQPHQW E &RHUFLYHHIIHFWZKHUHFRPSOLDQFHLVPDQGDWRU\ F &RPSUHKHQVLYHFRYHUDJHWKURXJKRXWVHFWRUV G $GDSWDEOHLQWHUPVRIFRQWHQWDQGQRYHWRIURPLQGXVWU\ H &UHGLELOLW\ZLWKFRQVXPHUV Weaknesses: D 'LIƄFXOWWRREWDLQOHJLVODWLYHWLPH PD\EHRYHUWDNHQE\GHYHORSPHQWVLQWKHPDUNHW E 1HJDWLYHDSSURDFKUDWKHUWKDQSRVLWLYH F *HQHUDOOHJLVODWLRQLVXVXDOO\YDJXHZKLOHVSHFLƄFOHJLVODWLRQLVFRPSOH[ G &ULPLQDOODZLVXQZLHOG\DQGLQƅH[LEOH H 8QLQWHQGHGFRQVHTXHQFHVQRWIRUHVHHQE\OHJLVODWRUV I %XLOWLQREVROHVFHQFH Source: OECD, 2015, Industry Self-regulation: Role and Use in Supporting Consumer Interests. 7KHUH DUH YDULRXV FDVHV RI JRYHUQPHQWV failing to GHFLVLRQGXULQJLWVHDUO\JURZWKSKDVHWRGHYHORSLWV VHFXUH DGHTXDWH VWDWXWRU\ UHJXODWLRQ VRPHWLPHV RZQUHJXODWLRQVDQGWREHKDYHDVLILWZHUHDUHJXODWHG GXH WR SROLWLFDO OREE\LQJ E\ WKH LQGXVWU\ FRQFHUQHG entity.107 ,Q FRQVHTXHQFH PDQ\ VWDWHV KDYH SURPRWHG VHOI UHJXODWLRQ DV D IDOOEDFN RSWLRQ VRPHWLPHV XQGHU In another case, client protection principles were developed as a code of ethics by Accion and other SUHVVXUH IURP FRQVXPHU OREELHV ,QGHHG FRQVXPHU PLFURƄQDQFH LQGXVWU\ LQYHVWRUV ZKR HVWDEOLVKHG WKH JURXSV XVXDOO\ SUHIHU UHJXODWLRQ RYHU VHOIUHJXODWLRQ 6PDUW &DPSDLJQ IROORZLQJ ZLGHVSUHDG FULWLFLVP RI EXW SUHIHU VHOIUHJXODWLRQ RYHU QR IUDPHZRUN DW DOO WKH86PLOOLRQSURƄWPDGHE\&RPSDUWDPRVRI There are also cases where governments have been VORZ WR DFW DQG EXVLQHVVHV KDYH WDNHQ WKH LQLWLDWLYH 107 20RUDZF]\QVNLDQG03LFNHQV 3RRUSHRSOHXVLQJ WRGHYHORSFRGHVRISUDFWLFHWKHPVHOYHV03HVDLQ PRELOHƄQDQFLDOVHUYLFHV 2EVHUYDWLRQVRQFXVWRPHUXVDJH .HQ\D LV D FDVH LQ SRLQW KDYLQJ WDNHQ WKH VWUDWHJLF DQGLPSDFW)RFXV1RWH&*$3%ULHI 44 Manual on Consumer Protection Box 5. 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Rationale for strict liability SURGXFHU PD\ EH KHOG OLDEOH IRU FDXVLQJ WKH LUUHJXODULW\ DQG IDLOLQJ WR GLVFRYHU WKH GHIHFW The rationale for strict liability is: EHIRUH LW ZDV VROG WR WKH FRQVXPHU ,Q VXFK FDVHV WKH GHƄQLWLRQ RI qSURGXFHUr RI WKH • It is a means for spreading the risks attached to GHIHFWLYHSURGXFWZRXOGDOVRH[WHQGDORQJWKH WKHXVHRIDSURGXFWDFURVVDOOWKRVHUHVSRQVLEOH SURGXFWLRQFKDLQIURPWKHPDQXIDFWXUHUWRWKH for bringing goods and services to the market, VXSSOLHURIWKHSURGXFWHYHQZKHQQRWGLUHFWO\ UDWKHUWKDQOHWWLQJWKHULVNEHDVVXPHGE\WKH LQYROYHGLQWKHPDQXIDFWXULQJSURFHVV XQIRUWXQDWHYLFWLPV,QFHUWDLQVHFWRUVWKLVPD\ EHGRQHWKURXJKDFRPSXOVRU\LQVXUDQFHZLWK • A design defectRFFXUVZKHQDZKROHSURGXFW OLQH RU HYHU\ SURGXFW RI D SDUWLFXODU PRGHO LV WKHSUHPLXPEHLQJERUQHE\WKHSURGXFHU GDQJHURXVO\GHƄFLHQW$SURGXFWLVGHIHFWLYHO\ • ,W UHƅHFWV DQ DVVXPSWLRQ WKDW WKH SURGXFHU GHVLJQHG LI WKH SURGXFW LV PRUH GDQJHURXV VKRXOG EH DEOH WR UHƅHFW WKH FRVW RI OLDELOLW\ WKDQ DQ RUGLQDU\ FRQVXPHU ZRXOG H[SHFW RU DFWXDO RU SRWHQWLDO LQFOXGLQJ WKH FRVW RI LI WKH EHQHƄWV RI WKH SURGXFWpV GHVLJQ GR LQVXUDQFH LQWKHSULFHRIWKHSURGXFW(YHQLQ QRW RXWZHLJK LWV ULVNV $ PDQXIDFWXUHU PD\ WKHDEVHQFHRIIDXOWWKLVSODFHVUHVSRQVLELOLW\ be held liable if it fails to take reasonable ZKHUHLWFDQEHPRUHUHDGLO\DVVXPHG FDUH WR HQVXUH WKDW D SURGXFW LV GHVLJQHG 66 Manual on Consumer Protection WR SHUIRUP VDIHO\ 0DQXIDFWXUHUV PXVW QRW SUDFWLFHLPSURYHV6XFKSURGXFWVDUHWKHUHIRUH RQO\HQVXUHWKDWWKHLUSURGXFWVDUHVDIHZKHQ WHUPHG qGHIHFWLYHr DV VDIHU DOWHUQDWLYHV RU WKH\DUHXVHGLQWKHLQWHQGHGZD\EXWDOVR UHSODFHPHQWVKDYHVXEVHTXHQWO\HPHUJHG LQ XQLQWHQGHG WKRXJK IRUHVHHDEOH ZD\V ,Q GHWHUPLQLQJ SURGXFW OLDELOLW\ WKH FRXUWV • A post-marketing defectFRQFHUQVWKHIDLOXUH DSSO\WKHqXQUHDVRQDEO\GDQJHURXVrWHVWRU WR ZDUQ RI GDQJHUV WR UHFDOO SURGXFWV RU WR DFRPELQDWLRQRIWKHFRQVXPHUH[SHFWDWLRQV take other remedial action after a danger has DQG qULVNEHQHƄWr WHVW WR GHWHUPLQH LI WKH EHHQ GHWHFWHG 0DQXIDFWXUHUV PXVW VHULRXVO\ design is defective. FRQVLGHUWKHQDWXUHDQGH[WHQWRIZDUQLQJVWKDW PXVW EH LVVXHG ZKHQ WKH\ EHFRPH DZDUH RI • Warning defect$PDQXIDFWXUHUKDVDGXW\WR GDQJHUVLQWKHSURGXFWDIWHULWKDVEHHQVROG SURYLGH DGHTXDWH LQVWUXFWLRQV FRQFHUQLQJ WKH These involve hazards that are discovered after VDIHXVHRILWVSURGXFWDQGPXVWZDUQEX\HUVRI DVDOHZKLFKWKHPDQXIDFWXUHUGLGQRWNQRZRI DQ\GDQJHUVDVVRFLDWHGZLWKWKHSURGXFW:KLOH RUZRXOGQRWKDYHUHDVRQDEO\EHHQH[SHFWHG WKH SURGXFW GHVLJQ LWVHOI PD\ QRW EH LQKHUHQWO\ WRNQRZRIEHIRUHLWVROGWKHSURGXFW GHIHFWLYHWKHSURGXFWFDQEHUHQGHUHGGHIHFWLYH E\WKHODFNRIVXFKDZDUQLQJ,IVXFKZDUQLQJV DUHQRWSUHVHQWWKHPDQXIDFWXUHUPD\EHOLDEOH 6. Standards for determining IRULQMXULHVFDXVHGE\WKHSURGXFW0DQXIDFWXUHUV defectiveness KDYHDGXW\WRSHUIRUPVDIHW\WHVWVWRGHWHUPLQH There are several standards for determining ZKDWZDUQLQJODEHOVQHHGWREHSXWRQDSURGXFW defectiveness. These are as follows: 7KHVH WHVWV VKRXOG VLPXODWH FRQGLWLRQV XQGHU ZKLFK WKH SURGXFWV ZRXOG RUGLQDULO\ RU HYHQ • Consumer expectations. 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RQ 'DWD 3URWHFWLRQ IRXQG WKDW (XURSHDQV KDYH &UXFLDO WR WKLV ZLOO EH HVWDEOLVKLQJ ULJKWV WR ZLGHVSUHDGFRQFHUQVDERXWWKHFRQVHTXHQFHVRIWKHLUGDWD EHLQJPLVXVHG0RUHWKDQWZRWKLUGVRIUHVSRQGHQWVZKRIHHO GDWD SRUWDELOLW\ DQG DJUHHG VSHFLƄFDWLRQV RQ that they do not have complete control over their personal interoperability between platforms, so that GDWDVD\WKH\DUHFRQFHUQHGDERXWWKLVODFNRIFRQWURO6HH LQGLYLGXDO SULYDF\ DQG VKDULQJ SUHIHUHQFHV KWWS ELWO\+MY$L, FRXOG EH DJJUHJDWHG DURXQG D SHUVRQ DQG 274 )RU PRUH H[DPSOHV VHH &LWL]HQV $GYLFH Personal Data Empowerment: Time for a Fairer Data Deal?6HHKWWS easily transported between services. This has ELWO\;WU,%* WKHSRWHQWLDOWRJLYHFRQVXPHUVDVKDUHLQWKH XIII. Privacy and data protection 107 XWLOLW\ YDOXH RI WKHLU GDWD DQG LQFUHDVH WKHLU DOOEXWWKHPRVWDVVLGXRXVFRQVXPHUV)RU81&7$' leverage in the marketplace. D qFRQVHQWr DSSURDFK UHODWHV WR ZKHWKHU LQGLYLGXDO FRQVXPHUVDUHDEOHWRFRQVHQWWRWKHWUDQVIHURIWKHLU 2WKHUHOHPHQWVRIHOHFWLYHƅH[LELOLW\VXFKDVqFRRNLHVr GDWDWRDIRUHLJQFRXQWU\7KLVDSSURDFKLVDYDLODEOHLQ DQGqDGEORFNHUVrDUHGHYHORSLQJDOORZLQJLQGLYLGXDO WKH(XURSHDQ8QLRQDQGVRPHRWKHUMXULVGLFWLRQVEXW FRQVXPHU FKRLFH ERWK QHJDWLYH DQG SRVLWLYH Box 17. Key challenges for data protection 1. Addressing gaps in coverage: there is no single global agreement on data protection. The three key gaps in national coverage are: D $VLJQLƄFDQWQXPEHURIFRXQWULHVKDYHQRGDWDSURWHFWLRQODZDWDOO E $VLJQLƄFDQWQXPEHURIFRXQWULHVKDYHRQO\SDUWLDOODZVRUODZVWKDWFRQWDLQEURDGH[HPSWLRQV F ,QVRPHFLUFXPVWDQFHVLQGLYLGXDOFRPSDQLHVFDQOLPLWWKHVFRSHRIWKHLUSULYDF\SURPLVHV XVXDOO\LQWKH ƄQHSULQWRISULYDF\SROLFLHV 2. Addressing new technologies: D &ORXGFRPSXWLQJ E 7KHLQWHUQHWRIWKLQJV F %LJGDWDDQDO\WLFV 3. Managing cross-border data transfer restrictions: QXPHURXVRSWLRQVDQGDUUDQJHPHQWVDUHLQSODFHIRU PDQDJLQJGDWDƅRZVLQDZD\WKDWVWLOOSURWHFWVWKHULJKWVRIFLWL]HQV7KHPRVWFRPPRQPHFKDQLVPVDUH D $OORZLQJRQHRIIGDWDWUDQVIHUVWKDWPHHWFRPPRQGHURJDWLRQVRUqWHVWVr IRUH[DPSOHUHTXLUHPHQWVWRIXOƄ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ƄFOHJDODJUHHPHQWEHWZHHQMXULVGLFWLRQV HJ(XURSHDQ8QLRQ 8QLWHG6WDWHVRI$PHULFDDJUHHPHQWVRQWUDQVIHURIDLUOLQHSDVVHQJHUGDWDDQGƄQDQFLDOVHUYLFHVGDWD I 6RPHFRPELQDWLRQRIWKHRSWLRQVDERYH 4. Balancing surveillance and data protection: most laws and regulations are silent on this issue, which has come under scrutiny since the revelation of the extent of surveillance. The broad extent, scope and purpose of surveillance should be open, even if some operational details remain secret. D 6XUYHLOODQFHVKRXOGEHOLPLWHGWRVSHFLƄFQDWLRQDOVHFXULW\DQGODZHQIRUFHPHQWREMHFWLYHV E 3HUVRQDOGDWDFROOHFWLRQGXULQJVXUYHLOODQFHVKRXOGEHqQHFHVVDU\DQGSURSRUWLRQDWHrWRWKHSXUSRVHRIWKH VXUYHLOODQFH F 6XUYHLOODQFHDFWLYLWLHVVKRXOGEHVXEMHFWWRVWURQJRYHUVLJKWDQGJRYHUQDQFH G $OOLQGLYLGXDOGDWDVXEMHFWVVKRXOGKDYHWKHULJKWWRHIIHFWLYHGLVSXWHUHVROXWLRQDQGOHJDOUHGUHVVUHJDUGLQJ VXUYHLOODQFH LUUHVSHFWLYHRIWKHLUQDWLRQDOLW\ H 3ULYDWHVHFWRULQYROYHPHQWLQVXUYHLOODQFHVKRXOGEHOLPLWHGWRDSSURSULDWHDVVLVWDQFHLQUHVSRQGLQJWRD VSHFLƄFUHTXHVW I 3ULYDWHVHFWRURUJDQL]DWLRQVVKRXOGEHDEOHWRGLVFORVH LQEURDGWHUPV WKHQDWXUHDQGIUHTXHQF\RIUHTXHVWV IRUSHUVRQDOGDWDWKDWWKH\UHFHLYHIURPJRYHUQPHQWODZHQIRUFHPHQWDQGVHFXULW\DJHQFLHV 5. Strengthening enforcement: there is a trend towards strengthening enforcement powers and sanctions in WKHGDWDSURWHFWLRQƄHOG6WUHQJWKHQLQJHQIRUFHPHQWKDVEHHQDPDMRUWKHPHLQDPHQGLQJDQGXSGDWLQJODZV QRWDEO\LQ$XVWUDOLDWKH(XURSHDQ8QLRQ+RQJ.RQJ &KLQD DQG-DSDQ 6. Determining jurisdiction: WKLVKDVEHFRPHDSURPLQHQWLVVXHLQGDWDSURWHFWLRQUHJXODWLRQSDUWO\GXHWR WKHZLGHVSUHDGGDWDƅRZVDFURVVERUGHUVDQGSDUWO\GXHWRWKHODFNRIDVLQJOHJOREDODJUHHPHQWRQGDWD SURWHFWLRQ DQGWKHFRQVHTXHQWIUDJPHQWDWLRQRIGDWDSURWHFWLRQUHJXODWLRQ 7. Managing the compliance burden: VRPHGDWDSURWHFWLRQUHJXODWLRQLVFULWLFL]HGIRUEHLQJRYHUO\ FXPEHUVRPHRUH[SHQVLYHWRFRPSO\ZLWKRUWKDWLWFUHDWHVVSHFLƄFFRPSOLDQFHEXUGHQVIRUVPDOOHU EXVLQHVVHV Source: UNCTAD Study on Data Protection and International Data Flows (2016).281 XIII. Privacy and data protection 109 G. 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This embodies VR2QFHDGLVWULEXWLRQQHWZRUNLVLQSODFHLWPDNHV SULQFLSOHV RI LQGHSHQGHQFH RI GHFLVLRQ QRHFRQRPLFVHQVHWRGXSOLFDWHLWE\OD\LQJDVHFRQG PDNLQJ 7KHUH DUH VXEYDULDQWV VXFK DV SULFH FRQQHFWLRQ EHWZHHQ WKH VDPH SRLQWV 7KH qQDWXUDO FDS UHJXODWLRQ DV LQ WKH 8QLWHG .LQJGRP RI PRQRSRO\r SURGXFHG E\ WKHVH GLVWULEXWLRQ V\VWHPV *UHDW %ULWDLQ DQG 1RUWKHUQ ,UHODQG RU UDWH RI OHDYHV FRQVXPHUV qWLHG LQr WR SDUWLFXODU VXSSO\ UHWXUQ UHJXODWLRQ DV LQ WKH 8QLWHG 6WDWHV RI companies. $PHULFD DQGDVVXPHGRSHUDWLRQDOSURƄWV DV +RZHYHU WKLV DVVXPSWLRQ LV OHVV YDOLG QRZ WKDQ D LQWKH5XVVLDQ)HGHUDWLRQ JHQHUDWLRQDJR0DQ\DVSHFWVRIQDWXUDOPRQRSRO\DUH • Regulation by contractDVLQ)UDQFH GLVVROYLQJDQGVLQFHWKHPRYHRIWHOHFRPPXQLFDWLRQV WR PRELOH LQGLYLGXDOL]HG VHUYLFH LW KDV EHFRPH D • Outsourced regulation to third parties, for competitive service with fewer network effects as its H[DPSOHWKURXJKWDULIIUHYLHZVEHQFKPDUNLQJ UHODWLYHO\LQH[SHQVLYHFDSLWDODVVHWVFDQRYHUODSLQWKH DQG GLVSXWH UHVROXWLRQ &KLOH 6HQHJDO VDPH WHUULWRU\ 7KHUH DUH QHZ LVVXHV DERXW LQWHUQHW DQG 5RPDQLD KDYH DOO DSSOLHG VXFK UHYLHZ FDSDFLW\ZKLFKFRXOGUHFUHDWHQHWZRUNSUREOHPVLQWKH mechanisms. IXWXUHDQGWKHUHUHPDLQLVVXHVRIVSHFWUXPDYDLODELOLW\ There is however a problem of scale. Under the ZKLFKDUHQRWH[SORUHGKHUH%XWIRUPRVWSXUSRVHV WUDGLWLRQDO XWLOLW\ PRGHO DV ZDWHU DQG VDQLWDWLRQ WHOHSKRQH VHUYLFHV DUH FRPSHWLWLYH DQG VXEMHFW WR VHUYLFHVWHQGWREHUHJXODWHGDWPXQLFLSDOOHYHOLWLV LQGLYLGXDO FRQWUDFWV ZKLFK UHTXLUH VXSHUYLVLRQ RI D YHU\GLIƄFXOWIRUDQDWLRQDODJHQF\WRUHJXODWHVXFKD qIDLUWUDGLQJrQDWXUHFKHFNLQJIRUWUDQVSDUHQF\XQIDLU ODUJH QXPEHU RI SURYLGHUV ,Q FRQWUDVW LQ HOHFWULFLW\ FRQWUDFWWHUPVDQGDQWLFRPSHWLWLYHSUDFWLFHVVXFKDV ZKHUHWKHQXPEHURIVXSSOLHUVWHQGVWREHVPDOOHUDQG qORFNLQrFRQWUDFWV*LYHQWKHDERYHLQWKLVFKDSWHU WKHWHUULWRULHVODUJHUWKHQDWLRQDOUHJXODWRU\PRGHOKDV we concentrate on water/sanitation and electricity. been more feasible. C. REGULATION D. 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The spectrum of private sector participation Revenue Option Asset owners Investment Operation Length Risk collection Management public public public private 3–5 years public contract Lease or public shared private private 8–15 years shared affermage Concession public private private private 25–30 years private BOT shared private private private 20–30 years private Divestiture Private private private private LQGHƄQLWH private Notes: 1. BOT is a particular form of concession (Build-Operate-Transfer) in which ownership of a constructed operating asset HIIHFWLYHO\UHPDLQVZLWKWKHRSHUDWRUIRUDƄ[HGWHUPDQGLVWKHQWUDQVIHUUHGWRWKHSXEOLFDXWKRULW\IRUDQDJUHHGVXP,Q the short- to medium-term, it is akin to privatization. 2. The main difference between leases and affermages is that under leases, the operator’s remuneration depends on the customer tariff, while with affermages, the operator tariff is divorced from the customer tariff, even though the operator may be charged with collecting payments. 3. Across the whole spectrum including divestiture, it is usual for there to be government controls on tariffs. 4. “Traditional” outsourcing has similar features to management contracts, although the latter tend to be more comprehensive. Sources: principally Foster et al. 2005; also Guasch 2004. )UHQFK ZDWHU VHUYLFHV )UHQFK FRPPXQHV KDYH KDG }SHUFHQWRIDOOFRQWUDFWVDZDUGHGWRSULYDWHZDWHU UHVSRQVLELOLW\ IRU GULQNLQJ ZDWHU VLQFH EXW WKH RSHUDWRUV,QWKHLUVKDUHIHOOWR}SHUFHQWZLWK service is commonly provided by a private operator a greater prevalence of local and regional actors and XQGHUFRQWUDFW312 National legislation sets standards K\EULGV IRU H[DPSOH SXEOLF FRPSDQLHV RSHUDWLQJ VXFKDVQRQGLVFULPLQDWLRQEHWZHHQFXVWRPHUVDQG abroad as private companies.314 %\ SULYDWH ƄQDQFLDO SURELW\ RI RSHUDWRUV 7KH YDULRXV IRUPV RI ZDWHU RSHUDWRUV IURP GHYHORSLQJ FRXQWULHV ZHUH FRQWUDFW KDYH EHHQ HODERUDWHG DURXQG WKH ZRUOG VHUYLQJ PRUH WKDQ } SHUFHQW RI WKH GHYHORSLQJ RIWHQ XVLQJ WKH )UHQFK YDULDQWV DV RSWLRQV IRU ORFDO FRXQWU\ XUEDQ PDUNHW QRW LQFOXGLQJ &KLQD ZKHUH LPSOHPHQWDWLRQZLWKWKHPXQLFLSDOLWLHVDVFRQWUDFWRUV WKHUH ZHUH K\EULG FRQWUDFWV %\ WKH HQG RI and the private operators as contractees. some of the most active private operators had qVLJQLƄFDQWO\ UHWUHDWHG IURP GHYHORSLQJ FRXQWULHVr ,QWHUHVW LQ SULYDWL]DWLRQ UHDFKHG LWV SHDN DURXQG WKH DFFRUGLQJWR3KLOLSSH0DULQpVVWXG\RIWKHVHFWRUIRU WXUQRIWKHPLOOHQQLXP$Q2(&'VWXG\RISULYDWHVHFWRU WKH:RUOG%DQN SDUWLFLSDWLRQ LQ WKH ZDWHU VHFWRU FRPSOHWHG LQ GLVWLQJXLVKHGWZRSXUSRVHVIRUWKHWUHQGWRZDUGVWKH 0DULQ DQG ,]DJXLUUH DUJXHG DW WKH WLPH WKDW WKH SULYDWHVHFWRU qSULYDWHVHFWRULQYROYHPHQWZDVVHHQ HQWKXVLDVP SDUWLFXODUO\ IRU FRQFHVVLRQV WKDW as a way to improve the often poor performance of FKDUDFWHUL]HGWKH VKDGIDGHG qFRQWUDFWVRIWHQ SXEOLFO\ UXQ XWLOLWLHV DQGRU WR LQMHFW PXFK QHHGHG UHƅHFWHGH[FHVVLYHRSWLPLVPE\ERWKSULYDWHLQYHVWRUV LQYHVWPHQW FDSLWDO +RZHYHU H[SHULHQFH KDV QRW DQG JRYHUQPHQWV DQG WKH VRFLRSROLWLFDO GLIƄFXOWLHV DOZD\VPDWFKHGH[SHFWDWLRQVDQGWKHKRSHGIRUVXUJH of raising tariffs to levels covering costs were often LQSULYDWHLQYHVWPHQWƅRZVKDVQRWPDWHULDOL]HGr313 XQGHUHVWLPDWHG )LQDQFLDO PDUNHWV ZHUH KHVLWDQW WR SURYLGHQRQUHFRXUVHƄQDQFLQJIRUZDWHUSURMHFWVRIWHQ 7KHWXUQRIWKHPLOOHQQLXPVDZDVKLIWLQWKHSDWWHUQ UHTXLULQJWKDWƄQDQFLQJEHEDFNHGE\WKHVSRQVRUVp RISDUWLFLSDWLRQLQWKHZDWHUVHFWRULQSDUWLFXODU%\ EDODQFHVKHHWVr%\}SHUFHQWRILQYHVWPHQW MXVW ƄYH LQWHUQDWLRQDO FRPSDQLHV DFFRXQWHG FRPPLWPHQWV PDGH VLQFH } SHUFHQW LQ IRU } SHUFHQW RI WKH SRSXODWLRQ VHUYHG E\ SULYDWH QXPEHU ZHUH HLWKHU FDQFHOOHG RU XQGHU GLVWUHVV RSHUDWRUV )URP t WKH VDPH ƄYH ZRQ 314 2(&'RSFLW 312 67UÆPROHWDQG'%LQGHULa régulation des services 30DULQ Public-Private Partnerships for Urban Water d’eau et d’assainissement dans les pays en développement Utilities: A Review of Experiences in Developing Countries $)' :RUOG%DQN 313 2(&' Financing and Pricing Water: The Roles of 3 0DULQ DQG $. ,]DJXLUUH Private Participation in Government Policies, the Private Sector and Civil Society, Water, Toward a New Generation of Projects? 33,$):RUOG (19(32&*)6' %DQN XV. 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