Strategic Directions
		Defining Activity Parameters
		Maximising Our Influence
		Prioritising Issues

The Ministry of Consumer Affairs takes a forward-looking and pro-active stance                     ... our focus on the consumer as a major player in market efficiency                                             ... targeting of assistance to individuals who are disadvantages, vulnerable and most in need             ... self-regulation has the potential to make a significant contribution to good consumer policy and practice                                                               ... The Ministry is conscious of the importance of maintaining close working relationships with consumer and business groups                                                                     As an operating division of the Ministry of Commerce, we have a necessarily close relationship with the Ministry                             Our relationship with Australian organisations is particularly important                                       ... we maintain close liaison on an issue-by-issue basis with officials in Australia       We have identified a need to more explicitly articulate our policy position                         The Ministry has limited policy resources and to be effective it has to prioritise carefully           ... can we achieve our objectives within the available resources?

Strategic Directions The Ministry of Consumer Affairs takes a forward-looking and pro-active stance to its work - and it does this in the context of specific strategic directions. Because we have limited resources, we have to direct our activities for maximum effect. We also have to be clear about what is appropriate for us to achieve, and why we are trying to do so. Our strategic direction is determined by: Our environment - which defines the parameters of our activities Our focus - which defines who we see as consumers Our relationships - which give us the means to achieve our purpose. DEFINING THE PARAMETERS OF OUR ACTIVITIES The Ministry operates within a number of different environments. Each one of these environments both constrains our scope and offers opportunities for developing new ways of approaching our work. The fiscal environment has the most immediate impact. The Ministry's budget is relatively small and we choose our work priorities with care. We aim to contribute to wider Government policies, to complement and not duplicate the work of other public organisations, and to deliver programmes that have real benefits for the marketplace. The economic environment has given us our focus on the consumer as a major consumer as a major player in market efficiency. The premise behind current economic thinking is that the best outcomes for business and consumers are produced by open and competitive markets. Open and competitive markets are based on the notion of consumer sovereignty. That is, consumers' purchasing decisions determine the range and quality of the goods and services that are supplied. These markets, however, are not always perfect. Breakdowns can occur. They can occur when there are monopolies or barriers to market entry, both of which have the effect of limiting consumer choice. Or they can occur when consumers lack the information they need to make choices in a complex purchasing decision, or to demand redress when a market product is faulty. It is important that transactions in the marketplace work well. When markets are imperfect, they are not able to deliver sovereignty to consumers. Nor does competition always deliver its benefits evenly. For example, competition may eventually force the suppliers of poorly performing goods and services to leave the market. But this may take a considerable time. And until it occurs, consumers will continue to suffer losses - which can lead to inefficiency in those markets. The Ministry's work is aimed at increasing the ability of consumers to participate in the open and complex economy which we now have. By doing this, we extend consumer choice, enhance competition, and help develop a market which is of mutual benefit to consumers and traders. Deregulation and the reform of outdated or unworkable legislation are features of the legal environment within which the Ministry operates. Hence our emphasis on consumer self-help, and both self-regulation and voluntary corrective action by industry groups. The aim here is to make sure that excessive or inadequate regulation does not interfere with the efficiency of markets, either directly or through hindering the exercise of effective consumer choice. The legal environment also requires us to monitor existing legislation and to promote law that is accessible, informative, and capable of ensuring compliance. Our cultural and social environment emphasises individual self-reliance. It also emphasises the targeting of assistance to individuals who are disadvantaged, vulnerable and most in need. Both these principles carry through into the Ministry's work - in its 'self-help" approach, and in its target groups of consumers. Self-Regulation "Light-handed" regulation is the current approach to market and industry regulation in New Zealand, and self-regulation is emerging as an alternative to Government regulation in some market areas. Self-regulation has the potential to make a significant contribution to good consumer poliy and practice in New Zealand, and so we are encouraging and monitoring its development. For a self-regulatory regime to be effective for consumers it must: Have the commitment of all members of that particular industry Be developed in consultation with consumers and their representatives Be publicised Be administered in a sound and transparent manner Be monitored actively Be reviewed regularly, and in consultation with consumers and their representatives And, in terms of its content, it must: Go beyond what is required strictly by law Include an inde pe ndent disputes-resolution process which involves consumer representatives Have staff who are responsible for applying it and who are trained in the principles and procedures to be adopted. We have already been involved in the establishment of two important self-regulatory arrangements: the Banking Ombudsman and the Insurance & Savings Ombudsman. We have also produced a Guideline on Developing a Code of Practice (October 1993), a reference document for business organisations that incorporates overseas work on self-regulation. We are currently planning to review the Guideline to take into account more recent New Zealand experience. We are also preparing a policy paper on self-regulation, to help define when it is an appropriate policy for dealing with marketplace issues. We also work within an international environment - and so are guided by the 1985 United Nations' Guidelines for Consumer Protection which successive governments have applied in developing New Zealand's consumer law. These guidelines contain eight consumer rights: to have access to basic essential goods and services to be protected from unsafe products and practices to be given the information necessary to make informed choices to choose among a range of goods and services to be represented in the making and execution of government policy have redress against unfair practices, shoddy goods and poor services be educated on basic consumer knowledge and skills to enjoy a healthy environment. Maximising Our Influence The current environment of self-reliance and self-regulation means that persuasion, consultation and networks have become valuable mechanisms in promoting a fair and informed marketplace. As part of making sure that our views have maximum impact, we have concentrated on developing sound relationships with consumer and business groups, other government agencies, and international consumer organisations. Consumer and business groups The Ministry is conscious of the importance of maintaining close working relationships with consumer and business groups. Both are consulted on proposed reforms and developments, and they in turn provide information on the impact of proposals on their members and clients. The Ministry works closely with consumer groups such as Consumers' Institute, the New Zealand Association of Citizens Advice Bureaux, the National Council of Women, the Community Law Centres, Budget Advisory Services, the Automobile Association, Plunket, and the Maori Women's Welfare League. We keep them informed of the Ministry's activities, consult them on issues, and obtain information from them. We are active in providing resources and training to organisations that are strategically located in the community - for example we have produced a comprehensive manual on consumer-complaints handling for the Citizens Advice Bureaux and Budget Advisory Services, and have instituted training in consumer law for workers in both these organisations. The Ministry recently convened a Consumer Issues Forum for government and non-government agencies with an interest in consumer issues. The forum identified areas of common interest where, with further work, we could achieve a more efficient use of resources and bring about benchmarking of practices. This will lead to better overall outcomes for consumers. The forum will meet from time to time and will work on issues identified at the initial meeting. We have also created a product safety network, encompassing both consumer and business interests. This acts as an information-exchange for product safety matters and ensures that both business and consumers can have input into policy issues in this area. We also work on standards committees to assist in developing appropriate safety standards for products such as toys, bicycles, nightclothes, strollers and resin chairs. In its relationships with business groups, the Ministry liaises most closely with those whose activities directly affect consumers - such as the Retail and Wholesale Merchants' Association, Manufacturers' Federation, and the various groups representing the banking and financial services sectors. Such consultation is designed to alert business to emerging developments, to encourage traders to meet their legal obligations and become more responsive to consumers, and to promote appropriate industry self regulation. The Ministry is continuing to build effective relationships with expert groups in the private sector - with economists, academics, and other commentators. This allows us to have access to specialised technical expertise (for example, for peer review of our policy papers). Extending consumer representation The Ministry operates a Consumer Appointments database, which acts as a resource for organisations who wish to appoint consumer representatives. This database is :regularly updated. When we receive requests for nominations, we contact suitable people from the database for permission to put their names forward to the organisation concerned. The Ministry has also developed a resource for consumer representatives on how they can be effective in representing consumers. This resource is distributed to employees. /font> Other government agencies As an operating division of the Ministry of Commerce, we have a necessarily close relationship with that Ministry. The closeness of that relationship means that a process of mutual influence is possible - it is notable that the Ministry of Commerce's recently developed mission statement specifically acknowledges the importance of consumers: "...Commerce will be recognised as a leader in both the delivery of services to business and consumers, and in the provision of policy advice to the Government on business and consumer issues. Apart from the Ministry of Commerce, we have good working relationships with the Ministry of justice, the Department for Courts and the Commerce Commission. The Ministry of justice administers the Motor Vehicle Dealers Act 1975, the Credit Contracts Act 1981 and a range of other consumer-related legislation – and so we have a common interest in ensuring that existing (and new) consumer legislation is effective, is known about by consumers and traders, and is complied with. The Department for Courts, with its responsibility for courts and tribunals, oversees the Disputes Tribunals and Motor Vehicle Disputes Tribunals that play an important part in consumer redress. We have already established good working relationships with staff in this new department. The Commerce Commission is an independent body funded by government to enforce the Commerce Act 1986 and the Fair Trading Act. The Commission has built up considerable expertise in the Fair Trading Act through its enforcement activities. We draw on this expertise, meeting regularly with the Commission at both senior and operational levels. We consult the Commission on applications of the Fair Trading Act, reviews of any aspects of it, and any proposals to create regulations under it. We also pass on to the Commission information about any possible breaches of the Act which may need Commission attention or action. International consumer organisations Our relationship with Australian organisations is particularly important because of New Zealand's obligations under ANZCERTA (the Memorandum of Understanding on the Harmonisation of Business Law) and the Trans Tasman Mutual Recognition Agreement. The Minister of Consumer Affairs participates in the Ministerial Council on Consumer Affairs (MCCA) which meets once a year. This is a valuable forum for information exchange and, in particular, the harmonisation of policy initiatives. A series of officials' meetings supports the Ministerial Council on Consumer Affairs and ensures effective liaison and harmonisation on trade measurement issues, education, fair trading enforcement, and product safety. Departmental heads also meet to identify key strategic issues for Ministers' attention. We participate in the Consumer Policy Committee of the Organisation for Economic Cooperation and Development (OECD). This committee discusses both product-safety and market-related issues, and we normally attend one meeting a year. The Ministry is currently actively involved in a number of OECD issues including the development of an international product safety notification system through the Internet. We are a corresponding member of Consumers International, which has been active in establishing Pacific Island and Asian networks for consumer organisations. Membership of these two organisations allows us to gain information that is valuable in the development of consumer policy in New Zealand. It also gives us the opportunity to communicate New Zealand's experiences to the rest of the world. The Ministry is a corresponding member of the International Organisation of Legal Metrology (OIML). We look to this organisation for expert technical guidance in the legal aspects of weights and measures, and for international consistency in standards. The Ministry is a member of the Asia Pacific Legal Metrology Forum (APLMF). This is a specialist regional body set up under the Asia Pacific Economic Co-operation (APEC) umbrella. This organisation seeks to harmonise requirements in legal metrology across all the APEC economies. In addition to our membership of formally established organisations, we maintain close liaison on an issue-by-issue basis with officials in Australia, the United Kingdom, the United States and Canada. Such contact is generally low key, but is sufficient to ensure we have an effective working knowledge of global consumer developments that will help inform policies and programmes in New Zealand. Using policy and framework papers to maximise our influence We have identified a need to more explicitly articulate our policy position on issues that underpin our activities. We believe that this will enhance the quality of our work and help extend our influence with other government departments, and consumer and business groups. These policy papers will be based on our current views of issues. They will be rigorously peer-reviewed by outside commentators and discussed with business and consumer groups. During the 1996197 year we are working on the following policy papers: Self Regulation and Codes of Practice Unfair Contracts Redress Principles Voluntary versus Mandatory Product Safety Standards Information Disclosure. We have also identified benefits in developing framework papers. These will be used largely for improving the quality of our policy advice, although some may be used to convey our approach to outside agencies and groups. We are currently working on two such papers: A framework for cost benefit analysis of policy proposals specifically tailored for consumer issues A framework for consulting Maori on Ministry policy proposals. These papers will also be reviewed by outside commentators. Achieving Our Strategic Direction By Prioritising Issues The Ministry has limited policy resources and to be effective it has to prioritise carefully. We use the following criteria as a guide to determining whether an issue warrants detailed study: Is the issue relevant to the Ministry's stated purpose and outputs, and to the goals of Government? Is there evidence that the issue presents a problem for consumers, and would there be significant detriment to consumers if we did nothing? Does the issue impact upon the Ministry's specific target groups? Where the issue is product safety, does the risk assessment justify investigation and action? Is the Ministry the most appropriate agency to undertake this work? Are we avoiding overlap with other organisations? Does the political/commercial environment indicate that likely recommendations will be seriously considered, and can we achieve our objectives within the available resources? Can our input add value to policy making? The next chapter sets out a number of key issues that are based on our criteria for prioritising issues. Some of these issues are more urgent or immediate than others; all are important.

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