Today is Sunday, September 23, 2018

Consumer Protection: Beyond Lip Service

By J. Edgardo P. Cruz

In recent months, the global consumer market saw a wave of recall of toys made in China that do not comply with safety standards. Most of the toys withdrawn from the market were found to be containing high level of lead which is toxic if ingested by young children. Still others were found to have small parts that pose choking hazards to infants and toddlers. While there were hardly actual injuries or illnesses reported to have been caused by these toys, they were nonetheless immediately pulled out of the market not so much because they posed imminent health risks but because their manufacturers violated the law on product safety standards.

Product recall in developed countries, like the United States, is a common occurrence. But in the Philippines, it comes very few and far between. Of course, the reason is not that the products sold here are compliant with quality and safety standards. Rather, we have yet to develop an effective system for monitoring the quality and safety of products being sold in the market. Moreover, despite the passage of multifarious laws and administrative regulations on consumer protection, they are not being strictly enforced. Thus, many substandard and potentially dangerous products proliferate and consumer complaints about them simply fall between the cracks.

In principle, this should not be the case because in the Philippines, the doctrine of strict liability applies to manufacturers, producers and importers of consumer goods. Specifically, Republic Act No. 7394, otherwise known as the Consumer Act of the Philippines, expressly provides that "(a)ny Filipino or foreign manufacturer, producer and any importer shall be liable for redress, independently of fault, for damages caused to consumers by defects resulting from design, manufacture, construction, assembly and erection formulas and handling and making up, presentation or packing of their products, as well as for the insufficient or inadequate information on the use and hazards thereof" (Art. 97; italics supplied).

By the very wording of the law, a consumer who sustains damage or injury because of a defective product need not prove fault on the part of the manufacturer, producer or importer in order to recover damages. He needs only establish that the product is defective or unreasonably dangerous and that he suffered damage as a result of the defect or danger posed by the product.

The rule on strict liability is based on the premise that as between the consumer and the manufacturer, producer or importer, the latter is in a better position to prevent any danger or risk that the product may reasonably pose to end-users. Of course, the rule is not absolute. These defenses are available to the manufacturer, producer or importer of the item: (i) it did not place the product in the market; (ii) although it did place the product in the market, the same has no defect; and (iii) the consumer or third party is solely at fault.

While the law clearly tilts in favor of the consumer in product liability cases, in reality, the prevailing norm is still caveat emptor or "let the buyer beware". Under this doctrine, the consumer has no warranty of the quality or safety of the goods he buys. He cannot recover from the seller or manufacturer for defects in the product that render it unfit for ordinary purposes unless the latter acted fraudulently or misrepresented the quality of his goods. Thus, under the caveat emptor model, the buyer must at all times be cautious about what he buys.

The difficulty in enforcing the rule on strict product liability may be traced to several factors. One is the complex nature of the country's consumer market. To illustrate, consumer goods find their way to the end-user through various levels and series of distribution channels. While the origin of certain branded products may be easily traced because they are manufactured and sold by reputable entities, the same is not true for goods produced by small-scale or backyard industries that are, more often than not, informal producers or sellers that form part of the so-called "underground economy". Further complicating the matter is the proliferation of smuggled and counterfeit consumer goods. Illegally imported items, as well as fake goods, enter the market through shady, undocumented transactions and are, in turn, usually sold by itinerant vendors or merchants to the unsuspecting public. Thus, if a defective, smuggled or counterfeit item causes damage or injury to a consumer, he would not even know whom to sue.

While agencies, such as the Department of Trade and Industry, the Department of Health and the Department of Agriculture, have done their part in promulgating the necessary rules, designating relevant bureaus and desks, and mobilizing resources to assist in the enforcement of consumer protection laws, much remain to be done. Since these agencies have other administrative and regulatory mandates, ensuring product safety is just one of their many priorities and functions.

Indeed, the ideal set-up would be to have one central regulatory body, much like the United States Consumer Product Safety Commission which is charged with protecting the public from unreasonable risks of injury or death posed by defective and potentially hazardous consumer products. With such a body focused only on developing, reviewing and enforcing product safety standards as well as conducting research on potential product hazards, there will be a more proactive approach to ensuring consumer safety and protection.

As with several other problems besetting our country, the difficulty in enforcing product safety laws lies primarily in lack of funding. Certainly, the creation of a truly effective central consumer product safety agency will entail substantial investments in manpower, capital and technology. Notwithstanding this obstacle, the public and private sectors can, working together, somehow alleviate the risks posed by substandard and potentially hazardous consumer products through constant monitoring, effective consumer information campaigns and responsive mechanism for handling consumer complaints and concerns.

In the final analysis, the great divide between what is and what should be in the enforcement of product safety laws can only be filled through vigilant, proactive and cooperative efforts of market players and relevant government agencies.

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