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Address to E Commerce Code of Conduct Stakeholders

Hon Phillida Bunkle
Minister of Consumer Affairs

Address to E Commerce Code of Conduct Stakeholders
Centra Hotel
Auckland
8 June 2000
10am

Good morning and welcome! I have invited you here today to discuss an important topic – consumer protection in electronic commerce.

It will probably come as no surprise to you that I would ideally like to see appropriate measures put in place to ensure consumers have confidence in the electronic environment. This is important as New Zealand, and the world, moves towards an increasingly electronic-focussed society.

For now, I don't know that consumers have that confidence and it's important that we - both government and industry - address this. Next week, a comprehensive e-commerce package will be announced in the Budget. One of the elements of the e-commerce package will include funding of $400,000 spread over the next four years to specifically address consumer issues in e-commerce. The government recognises the importance of keeping consumer issues at the forefront of policy-making decisions in this growing area of commerce.

This funding will ensure a dedicated consumer focus in e-commerce through employing someone specifically to work with other government agencies, business and community sectors to ensure issues are properly represented in development of government electronic commerce policy.

A key part of ensuring consumer protection in this area is making sure our work is linked to international developments including development at the OECD and APEC.

So, with that in mind, consumers will have confidence when they are satisfied with four key areas.

 Knowing clearly who they are dealing with and what they are getting
 Security of Information
 Privacy
 Ability to solve any problems quickly and fairly.

Although I didn't need to invite you here to tell you this.

It is hardly possible to read an article or hear a news report about business to consumer electronic commerce without seeing references to these basic points.

And while it may seem that these issues are largely raised by consumer advocates, representatives or individuals, they are in fact more often than not, raised by businesses themselves.

We here in this room would all recognise the importance of appropriate consumer protection mechanisms. Consumer protection is good for the consumer, and business, alike. However, knowing that something is good and worthwhile is sometimes not enough.

This knowledge needs to be reinforced by action. Right now, we are seeking to do this by developing and implementing consumer protection that will build consumer confidence and support e-commerce as a business-to-consumer model.

Today is an important part of the developing stage – gathering your thoughts, your ideas, your criticisms, your fears, and your enthusiasm.

My Ministry released a report on Electronic Commerce in March this year that proposed a New Zealand Model Code of for Consumer Protection in Electronic Commerce.

As you will be aware, any action we take in New Zealand is limited to domestic transactions. However, the principles and standards in this Code draw heavily - as it should - on recently developed OECD guidelines. The Code is essentially the same as one announced in Australia recently.

Obviously this means that action in New Zealand needs to be consistent with and support international developments that will ensure the growth of consumer confidence on a global scale. The budget funding I alluded to earlier will go towards ensuring this happens.

Keith Manch will take you through some aspects of the Ministry's paper and the issues it raises shortly.

There are however, some issues I want to raise.

Prior to agreeing to the release of the report I discussed with my officials whether a self-regulatory approach would be sufficient to ensure that consumer interests are being protected. This discussion highlighted various issues that are referred to in the report. The first point is that:

 E-commerce is still relatively new and as we all know, consumer-to-business e-commerce is much less significant than business-to-business e-commerce.

To me this means that we now have the opportunity to put in place something that will set appropriate standards for consumer protection while at the same time, support the development of e-commerce.

Other points are:

 domestic law already applies to electronic commerce transactions that occur within New Zealand. An electronic transaction bill will be introduced this year to ensure that we harmonise the law relating to paper-based and electronic-based commerce. Issues around electronic transactions conducted across the border are more complex. These need to be addressed internationally.
 E-commerce is fast developing
 Business has strong incentives to ensure that consumers do have confidence
 E-commerce is global

These points are said to support the idea that self-regulation may be the way to go. Indeed, I have even been told that regulation for consumer protection in e-commerce is unnecessary, difficult to design, costly to administer and may restrict e-commerce development.

Frankly, I am not sure that I personally accept all of this.

What I do know is that as the Minister of Consumer Affairs I am determined that consumers should be given appropriate protection whether they are shopping in traditional "bricks and mortar", "clicks and mortar" or "pure Internet" businesses. I urge you and your businesses to embrace the opportunity to get a self-regulatory scheme right from the start.

I certainly hope that this meeting is productive in setting in place some good consumer protection mechanisms.


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