Module 3

Ethics of Consumer Protection

And Environmental Protection
Consumer and Consumer
Protection
 A consumer is any person who, or a firm, Hindu
Undivided family, cooperative, or association which
 Buys any goods for consideration which has been fully or
partly paid for, with a purpose that does not include resale
or any commercial purpose; and
 Hires or avails any services for a consideration which has
been partly or fully paid for, with a purpose that does not
include free service or services under a personal contract.
 Consumer protection refers to the steps necessary to be
taken or measures required to be accepted to protect
consumers from business malpractices.
Customers Information needs
The information needs of customers are:
 Detailed legal records with reference to products and services, such as
product liability, injury and unsubstantiated death claims over all
jurisdictions for five years; penalties inflicted and citations for
regulatory non-compliance, detailing each incident and corresponding
penalty, settlement effected and such related information.
 Risks of injury from normal usage of product/service;
 Noise, odor and other nuisances/problems associated with use of
the product/service;
 Design for recycling;
 Biodegradability of products and packaging;
Customers Information needs
 Unusual life cycle costs;
 Warnings, with appropriate detail;
 Content, additives and treatments of food and
medicines, sufficient to allow reasonably-informed
consumers to make rational market decisions and to
protect themselves and their families; and
 Hidden characteristics.
Parties to Consumer Protection-
a. Consumers: Should know their rights and exercise
them.
b. Businessmen: Producers, distributors, dealers,
wholesalers as well as retailers should pay due
attention to consumer rights in their own interest,
by ensuring supply of quality goods and services at
reasonable prices.
c. Government: The government should enforce
various laws and amend existing laws to protect
consumer interests.
History & growth of consumer
protection
• 1920s: Efforts in the US to reduce the exaggerated claims of
advertisers of goods and services and demands made for
impartial testing of goods.
• 1930s: Growth of consumer co-operatives, the first federal
consumer agency, food and drug administration, demands
for labelling of products and the introduction of USDA
stamps.
• 1940s: 150 local consumer councils across the United States
eventually drew together to form the National Association of
Consumers.
• 1950s: The American Council of Consumer Interests was
established by 750 members from universities, schools and
consumer research organizations.
Ralph Nader’s contribution to
consumer protection
• He coined the term “consumer advocate”.
• He called for the accountability of carmakers.
• He worked towards improved environment, healthcare,
insurance, pension and disability rights.
• He is the founder of numerous non-profit organizations.
• He educated America’s consumers.
• He started the US Public Interest Group (PIRG).
• He founded the Center for Study of Responsive Law, Center
for Auto Safety, the Disability Rights Center, the Pension
Rights Center, the Project for Corporate Responsibility, and
the Clean Water Action Project
Rights of a consumer
 The right to safety
 The right to be informed
 The right to choose
 The right to be heard
 The right to seek redressal
 The right to consumer education
Consumer duties and
responsibilities
Substantiate the complaint

 Listen to seller
 Cooperate with the seller if needed
 Avoid inconvenience to others
 Not personalize issues
 Not lend self to others
 Be well informed
 Understand the grievances redressal process
 Avoid impulsive buying
 Buy goods from authorized agents
How are Indian consumers
exploited
1) Exorbitant prices of products and services
2) Deceptive selling practices
3) False and misleading advertisements
4) Defective quality, higher prices
5) Sale of hazardous products to ignorant consumers
6) Suppression of material information
How are Indian consumers
exploited
7) False product differentiation
8) Producers’/sellers’ collusion
9) Supply of adulterated and substandard products
10) Cheating consumers by giving lesser quantity for
the price
11) Dishonoured guarantees and warranties
12) Poor redressal of customers’ genuine grievances
How are Indian consumers
exploited
13) Creating a scare out of scarcity
14) Making consumer buy unwanted goods
15) Misleading representation on utility of products
16) Manipulating conditions of delivery
17) Customers pay for numerous intermediaries
18) Fall in prices never passed to consumers
How are Indian consumers
exploited
19) Buying unaffordable goods
20) Advertisement cost
21) Counterfeits: These constitute a substantial
quantity of goods on store shelves
22) Hoarding and blackmarketing
23) Tie-in-sales
24) Gifts for products/services
Legal protection to consumers
 A number of laws have been passed by the Government of India over
the years to protect the interest of consumers.
1. Agricultural Products (Grading and Marketing) Act, 1937
2. Industries (Development and Regulation) Act, 1951
3. Prevention of Food Adulteration Act, 1954
5. Essential Commodities Act, 1955 The Standards of Weights and
Measures Act, 1956
6. Monopolies and Restrictive Trade Practices Act, 1969
7. Prevention of Black-marketing and Maintenance of Essential
Supplies Act, 1980
8. Bureau of Indian Standards Act, 1986
9. Consumer Protection Act, 1986
Consumer protection act 1986
 The Consumer Protection Act (COPRA), 1986,
conferred a legal right to the individual consumer
to seek legal redress or recover costs and damages
for injury or loans suffered by him/her as a result
of faulty, defective goods and services, bought or
secured for valuable consideration.
Rights of a consumer under Copra
 The SIX RIGHTS of the consumer as enunciated under
Section 6 of the COPRA are:
I. The Right to Safety
II. The Right to be Informed
III. The Right to Choose
IV. The Right to be Heard
V. The Right to Seek Redressal
VI. The Right to Consumer Education
Redressal agencies under copra
 Redressal agencies for settlement of consumer disputes:
• A Consumer Disputes Redressal Forum known as the
District Forum has been established by the State
Government in each district of the State by notification.
• A Consumer Disputes Redressal Commission known as
the State Commission has been established in each state
by the State Government by notification.
• A National Consumer Disputes Redressal Commission
known as the National Commission established by the
Centre by notification.
Consumer protection
(Amendment) Act 2002
 The main changes introduced by the Amendment Act are as follows:

• The District Consumer Redressal Forums can now deal with

complaints involving compensation amount upto Rs 2 million
• For the State Commission the limit is Rs 10 million
• For the National Commission, the limit is more than Rs 10
million.
• Setting up of benches and increase in the number of members in
the National and State Commissions. A sitting judge of the High
Court is to preside over selection committee when the president
of the State Commission is absent.
• In the absence of the incumbent president of the District Forum,
State Commission or National Commission, the senior member
to act as president of the respective bodies.
Consumer protection
(Amendment) Act 2002
• Minimum qualifications prescribed for members of all consumer
courts.
• For admission of complaints, issue of notices and disposal of
complaints a specific time frame has been prescribed.
• Exclusion of services used for commercial purposes from the purview
of consumer courts
• The court can award punitive damages.
• Any affected party to deposit 50 percent of the amount awarded to
the consumer if appealed against the order of the Forum
• If any person fails to pay compensation, the consumer court can order
recovery in the same manner as arrears of land revenue.
Environmental Ethics
History of environmentalism in USA
• Early 20th century: Establishment of National
Parks by Teddy Roosevelt’s administration.
• 1960s: Increasing concern on human health risks
posed by pollution.
• Environmental laws exacted by the US Congress
• Creation of the Environmental Protection Agency’s
(EPA) community-led recycling programmes.
• Protests against polluting businesses in “Not in My
Backyard” (NIMBY) campaigns.
Environmental preservation: role
of stakeholders
 Public opinion- it is crucial to the resolution of
environmental issues in democratic society. The public
has the power to support interest groups, elect and lobby
officials, pay taxes, work for companies, buy products
and support or reject policies.
 Media- it plays a major role to influence public
perception of environmental groups, corporations and
government. News publications and journals, television
and radio are the source of information to the public on
environmental issues.
Environmental preservation: role
of stakeholders
 Environmental groups- many groups are cooperating
with business and government to resolve environmental
issues. These organisations are often a reliable source of
information and support and represent public
sentiment.
 Corporations- As a result of pressure from
environmentalist and regulatory legislations, many
companies are working towards environmental
protection and improving quality. The key shift
occurring in the environmental regulation of industry is
from an emphasis on pollution control to an emphasis on
pollution prevention.
Environmental preservation: role
of stakeholders
 Government- the implementation of effective
environmental policy has been obstructed by many
factors: inadequate scientific knowledge, budgetary
deficiency, and conflict of disparate interests. Many
stakeholders who advocate or oppose environmental
protection seek to influence the government.
Future outlook on environment
 Environmentalism in the 21st century can be
characterized by three principles that serve as
bases for continued activism and policy
formulation.
 1. Public – Private partnerships
 2. International cooperation
 3. Sustainable development
Future outlook on environment
 Public – Private partnerships- partnerships are
voluntary collaborations between two or more
organisations with jointly defined agenda focused on
discrete, attainable and potentially attainable goals.
The life cycle of partnerships involves an integrated
relationship among stakeholders throughout the
decision and implementation process. Importance of
partnerships is the growing practice of corporations to
seek the assistance of NGOs to preserve endangered
species in their areas of operation, pooling the assets
of stakeholders and cooperatively reaching for a
solution.
Future outlook on environment
 International issues- many environmental issues are
international in nature. These include cross-
boundary pollution, common area resources, and
economic development. The economic
interdependence of nations foster cooperation in
resolving international issues. The absence of
international government, competition between
nations, and the complexity of international
relations all remain as obstacles to global
environmental policy.
Future outlook on environment
 Sustainable development- there are limitations to
the earth’s carrying capacity in the light of present
levels of technology, social organisation and
population. The current economic practices are
unsustainable, it is an undeniable fact that
developed countries have the knowledge to operate
sustainably. The key will be for government and
corporations to change practices in shifting to a
more efficient model of resource use.
Innovative business response to
environmental regulations
There are several reasons why those managing business are
becoming increasingly conscious of environmental issues:
 For management morale- to have good environment record
and the desire to earn good reputation as protectors of the
environment.
 To cut waste wherever possible.
 The environmental protection act (EPA) has acknowledged
the potential gains from pollution prevention.
 Advantages of taking a proactive stance towards
environmental regulation instead of fighting against
regulations. Some firms are looking beyond more compliance
and improving their environmental performance.
Innovative business response to
environmental regulations
 By incorporating principles of waste reduction into
industry led voluntary programmes they hope to foster
positive public opinion.
 Recent trend in regulation suggest that forward
looking firms will protect themselves through ‘green
design’ of their products and enhance their public
image by examining the entire life cycle of their
products.
 To keep the consumers happy, who are
environmentally conscious, companies have to ensure
that their products, packages and even processes are
environment friendly.
Innovative business response to
environmental regulations
 Eco-labeling is another example of companies trying to pacify
consumers with proof of environment friendliness of their
products.
 Potential savings through pollution prevention measures have
been increasing. Companies have found that reduction in
their use of raw materials and energy, and in the amount of
toxic wastes they produce could yield savings.
 The fear of incurring the cost of environmental damage has
risen as regulations have been tightened by governments and
courts of law.
Waste management & pollution
control
Environmental damage through industrial activity can be of
two types:
 1. Depletion of natural resources – excessive use leads to
reduction in natural resources that are extracted or used
up in the production of other goods, such as minerals,
fossil fuels etc. These resources are non-renewable.
 2. Degradation of the natural resources- it refers to
deterioration of the quality of the environment. All
production creates waste and pollution right through the
process of manufacturing to the disposal of the final
product. Waste-aerial, solid or aqueous degrade the air,
soil, water quality and pose health hazards/
Key strategies for industrial
pollution prevention
 Systematic waste reduction audit – will enable manufacturers
to take inventory and trace input chemicals and to identify
how much waste is generated through specific processes.
 Material balance- identifying processes, inputs, outputs,
recycle and reuse rates, deriving a preliminary material
balance and evaluating and re-fixing material balance.
 Economic balance- identifying costs and reviews to achieve
economic balance. According to cost-benefit ratio, experience
in the industrialized countries has proved that anti pollution
technology has been cost effective in terms of health,
property and avoiding environmental damage and that it has
made many industries profitable by making them more
efficient in the usage of resources.
Key strategies for industrial
pollution prevention
 Identifying waste reduction – identifying opportunities and
implementing them through simple process modifications
such as pollution prevention measures such as good house-
keeping, waste reduction and recycling, designing a waste
reduction strategy, implementing internal recycling for own
use or for others use, to reduce emission from the process and
also to reduce the need for continued supply of raw material
inputs.
 Use of newer, cleaner technologies – development of
preventive technologies to benefit current and future
scenarios, without transferring the problem from one media
to another such as water, air and land.
Key strategies for industrial
pollution prevention
 Life-cycle assessment- it starts by identifying and
quantifying energy, the material used and the waste
released into the environment, assessing the impact
of the energy and material uses and releases to the
environment and identifying and evaluating
opportunities of effecting environmental
improvement. It is a complex process beginning
with the goal definition, going on to inventory of
resources and requirements, and assessing the
possible threat to planet survival.
Managing environmental issues
Reinhardt suggests five different approaches to
managing environmental issues
1. Investing in environment friendly processes or
products.
2. Managing environmental regulations.
3. Investing in environmental performance
improvement, without increasing costs.
4. Combining all the three methods mentioned above
to change the basis for competition.
5. Looking at environmental issues from a risk
management perspective.
Charter for voluntary pollution
control
• The Ministry of Environment and Forests and the
country’s industrial sector have entered into a
partnership on voluntary pollution control by
releasing a Charter on Corporate Responsibility for
Environmental Protection in New Delhi on 13
March 2003.
• The Charter marks a shift from regulatory
enforcement of pollution control norms to
voluntary compliance by the industry to
significantly enhance the quality of environment.
India’s environmental policy
The Environment (Protection) Act, 1986 takes into account the following:
1. Water (Prevention and Control of Pollution) Act, 1974
2. Air (Prevention and Control of Pollution) Act, 1981
3. The Factories’ Amendment Act, 1987
4. The National Environmental Policy 2004
Environmental pollution created by individuals or corporations amounts to
public nuisance, therefore this can be controlled through criminal law.
Offensive smells, noise and air pollution are included under ‘nuisance’. Action
against such nuisance can be taken if it is repeated and committed
continuously. The nuisance may be public or private in nature. The public
nuisance interferes with the quality of life of the society. Therefore, pollution
originating from water, air and noise can be prevented by civil or criminal
laws.
Thank- you