Consumer Protection

Consumer protection has been a social issue since the early 1980s. With the rapid growth of the economy and the significant rise in income, consumers began to demand product safety and quality. As a result, the government has pushed ahead to implement consumer protection policies aimed at both enforcing stricter consumer related regulations and providing easy access to product information to all consumers. In particular, after acquiring membership in the OECD in 1996, the government has introduced several advanced policy measures aimed at consumer protection, including the recall and injury data collecting system for all consumer products.

The Consumer Protection Law (1980) is the basic law for consumer protection. This law specifies consumer's rights, business's obligations, and the government's role in consumer protection. Other laws related to consumer affairs include the Door-to-Door Sales Law, the Installment Sales Law and the Stipulation Regulation Law, which were all introduced in 1986. In order to reinforce consumer protection, the government enacted laws such as the Consumer Cooperatives Law (1999) and Product Liability Law (2000). Consumer Cooperatives Law will facilitate direct transactions between producers and consumers. Product Liability Law will strengthen consumer safety and help facilitate settlement of consumer disputes.



Organizations

Governmental Bodies

The Consumer Policy Deliberation Committee (CPDC) formulates year by year national comprehensive consumer policy and deliberates on matters related to drafting and revising laws or regulations. The CPDC, which was established on the basis of the Consumer Protection Law, consists of ministers in charge of consumer policy, representatives of consumer organizations and business associations.

Each ministry takes charge of consumer policies respectively. The Ministry of Finance and Economy (MOFE) regulates comsumer credit while the Korea Fair Trade Commission (KFTC) handles unfair trade practices as well as fraudulent or misleading labelling and advertising. The overseeing of food and drug safety is handled by the Korea Food and Drug Administration (KFDA). The Ministry of Commerce, Industry and Energy is responsible for consumer products safety.

Seven metropolitan cities and nine provinces have their own consumer protection ordinances and bodies, which are called the Consumer Protection Section. They were established to enforce consumer policies. At the local level, consumer policies are geared toward implementing regulatory measures, providing consumer information and stabilizing retail prices.


Korea Consumer Protection Board (KCPB)

The Korea Consumer Protection Board (KCPB) was established on July 1, 1987 in accordance with the Consumer Protection Law. The Board, located in Seoul, is an independent, semigovernmental organization financially supported by the government. Its function includes policy research, conducting surveys, providing consumer education, disseminating consumer information, redressing consumer complaints, as well as conducting product comparative testing.

The KCPB conducts surveys on unfair practices and hazardous products. It also reports on whether laws, regulations and institutions regarding consumer protection are carried out. Its results are used as a basis for providing consumer information and recommending policy alternatives to governmental agencies.

The KCPB publishes reports, study materials, legal information, fact sheets, and market reviews. The publications issued by the KCPB include Sobija Sidae (The Age of the Consumer), a monthly magazine which contains a vital resource of useful consumer information as well as consumer redress procedures. And Sobija Munje Yeon-gu is an annual research journal on consumer matters. The Consumer Newsletter in English version is published quarterly. In addition, the board publishes several pamphlets as well as audiovisual materials to enhance consumer awareness.

The board also provides consumer information through a computer communication network. The database contains various kinds of consumer-related information, including information on consumer complaints and damage cases, and consumer-related statistics. The KCPB homepage (www.cpb.or.kr) contains Sobi-Net, Price and Market Information Site, eConsumer Site and Consumer Safety Net. Sobi-Net (sobinet.cpb.or.kr) is information network accessible via the Internet and is jointly managed by the KCPB, local government, consumer groups and businesses. Price and Market Information Site (price.cpb.or.kr) is a portal site providing easy access to price and market information. The eConsumer Site (www.econsumer.or.kr) provides a broad range of information on consumer protection in e-commerce, and the Consumer Safety Net (safe.cpb.or.kr) is a hub site for consumer safety information. The KCPB has been actively participating in the activities of international organizations such as the OECD Committee on Consumer Policy, and the International Marketing Supervision Network (IMSN). Also the Board has been strengthening cooperation and collaboration with such organizations as Consumer International (CI), and the National Consumer Affairs Center of Japan (NCAC).

A consumer organization recruits members on a voluntary basis. Under the current Consumer Protection Law, consumers can form organizations to represent their interests and give voice to their opinion when consumer policy legislation is being undertaken.

There are 10 associations affiliated with the Korea National Council of Consumer Organization, three of which are located in Seoul. The number of local affiliates belonging to the organizations amounts to about 240.

These consumer organizations conduct surveys, testing remedies and assist consumer complaints. In addition, they serve as a watchdog to keep the prices of daily commodities reasonable and stable. Consumer organizations in Korea also exchange information with international consumer groups to insure consumer protection in the international market.



Consumer Safety

Consumer protection takes priority in consumer safety issues. The government established the Korea Food and Drug Administration (KFDA) in 1997 in order to cope positively with the safety problems related to foods and drugs. The KFDA performs inspections and tests on foods and drugs which are circulating in the domestic market to sort out unsafe and harmful products. Consumer goods are examined and tested by the Korea Agency for Technology and Standards (KATS), a government body established to prevent unsafe goods circulating in the domestic market. The Ministry of Health and Welfare (MOHW) takes charge of agricultural and marine food safety.

The KCPB is also acting to reinforce safety standards and to gather data related to consumer injury. In order to gather this information which is supposed to be used as a source for strengthening safety standards, the government is operating the KCPB as a Injury Data Collection Institution. Under the Injury Data Collection System, selected hospitals, police stations, fire stations and schools are designated as reporting agencies, and they regularly inform the KCPB of injury information they gather. Information received by the KCPB is then compiled and analyzed.

The Consumer Protection Law regulates products safety conditions. The statute contains provisions about a comprehensive recall system.

The government is committed to improving the price marking system in order to facilitate price competition among retailers to foster price stabilization. In this context, an open price system was introduced in 1997 involving cosmetics and drug products.

The government also plans to allow the open price system to be applied to other products, like industrial goods and foods. Consumer organizations and the KCPB are keeping close tabs on whether the labelling and advertising of products done by businesses are false or exaggerated. If the contents of labelling and advertising are proven to be false or exaggerated, the businesses will be accused of violating the Fair Labelling and Advertisement Law (1999).

The Korea Fair Trade Commission (KFTC) examines stipulations used when contracts are formed between consumers and businesses. If it is revealed that these stipulations are unfair, the KFTC can have them repealed. In addition, the KFTC also distributes standardized business stipulations for a variety of business transactions.



Consumer Information and Education

Consumer information is provided by consumer organizations and the KCPB, through a variety of media. Each ministry is required to make consumer information public. The KATS tests industrial goods and offers the results to the public domain. Consumer organizations also make public the results of their activities including surveys and tests.

The KCPB provides consumer information through an on-line computer network. The KCPB homepage contains the results of research conducted by the KCPB, involving price information, and warnings on probable injury. Consumers can also log on to the Internet homepage of the KCPB to find useful product information. The KCPB also provides consumer information through a number of periodicals and independent volumes and reports.

The purpose of the consumer education is to make consumers aware of their rights and force businesses to comply with consumer product and safety regulations. In middle and high schools, students are taught the importance of consumer rights under the regular school curriculum so that they can become educated consumers.

As a part of adult consumer education, consumer organizations and the KCPB provide diverse educational programs. Consumer organizations offer lectures on numerous consumer issues. The KCPB has also been operating multiple kinds of consumer education programs. In addition, the KCPB produces audiovisual educational materials and teaching texts which can be used as tools for consumer education and distributes them to major organizations engaging in consumer protection, such as schools, central and local governments.



Complaints and Redress

Consumer complaints are received and handled by local consumer counseling centers, consumer organizations and the KCPB.

Intervention on the part of the KCPB begins when a consumer initiates a complaint. In most cases, companies agree to put matters right voluntarily. If they fail to do so within 30 days, however, the Consumer Disputes Settlement Commission (CDSC) takes legal action. The CDSC, an agency for alternative dispute resolution (ADR), is composed of a chairman and 29 other members, who are selected from both the legal and academic communities, as well as from both industry and consumers.

If the parties involved in the dispute agree on the mediation offered by the CDSC, the agreement has the binding power of a judgment in a court. For the purpose of streamlining the procedure of complaint redress, the KCPB has started to develop a consumer complaints handling system which is expected to enable provincial governments, consumer organizations and the KCPB to cooperate with one another through an on-line network.

Meanwhile, the KCPB has established an on-line counseling site which will be able to receive consumer complaints. Complaints received through the KCPB Internet homepage are compiled and analyzed. They are later used as data for devising policy measures for protecting consumers. As electric commerce is growing rapidly in domestic market, the KCPB joined IMSN. IMSN is a network of governmental organizations involved in enforcement of fair trade laws and other consumer protection activities. The KCPB also launched an e-commerce surveillance system named the Internet Sentinel. In addition, the KCPB held a nationwide Internet Sweep Day Campaign to create a healthy Internet environment.



Nongovernmental Organizations

Korean NGOs and Their Prospects

Since the 1980s, the activities of nongovernmental organizations (NGOs) in Korea increased dramatically. As of 1997, they numbered over 10,000 - an indication of the growth of Korea's civil society. These organizations cover a diverse spectrum of interests including labor, the poor, women, youth, social welfare, charity, consumers, human rights, the environment, politics, economy, religion, mass media, culture and the arts. These groups are beginning to expand their activities overseas. Many representative Korean NGOs, such as the Citizens' Coalition for Economic Justice or Korean Federation for Environment Movement, have been actively collaborating with related international organizations.

Korean civil organizations first developed in opposition to the government. From the government's viewpoint, these organizations represented a challenge to state authority and therefore had to be suppressed. At the end of the 1980s, however, Korea's democratization movement began to bear fruit, with the result that social movements, which had previously been immersed in the struggle against the government began to take on other issues.

In the last several years, these movements have even begun to undertake substantial overseas projects. The Korean government has likewise established an organization for international civic cooperation. Founded in 1991, the Korea International Cooperation Agency (KOICA) is managed as a governmental aid organization under the auspices of the Foreign Affairs and Trade Ministry. In addition, NGOs such as Korea's UNICEF Committee have participated in work helping underdeveloped nations in Africa and Asia. Projects have dealt with disaster relief as well as general services to improve the quality of life. Activities have also included specific projects aimed at the development of potable water facilities, environmental improvements, disease treatment and prevention, basic education, and technical support. There are also a number of Korean religious missions to Africa, that send missionaries and provide on-site aid. In addition, the Korean Red Cross and other organizations work with international groups such as the World Food Program (WFP) to provide aid to starving people in North Korea.

Having worked for the public good of the nation, Korean NGOs are beginning to focus on projects benefiting the global community. These organizations work to alleviate hunger, which threatens a quarter of the world population, and deal with issues such as human rights, aboriginal rights, women's rights, in addition to projects aimed to promote democracy and protect the environment. In order to be more effective, they are now seeking to network and cooperate with other NGOs around the world.



Korean Civil Movements

During the last 10 years when the civil society has been formed and developed, the Korean civil movement has indeed made rapid progress. At present, thousands of civil society organizations have been established and have worked actively in various fields. Although every organization has not made equal progress, the quality of services has generally enhanced. The civil society organizations in Korea enjoy great support and expectations and exercise significant influence. It is during the last 10 years that the civil movement has taken root successfully in Korean society.

One could attribute the success of the Korean civil movement in an underdeveloped political structure. However, the main reason is that it struggled for the democratization of our society through the 1980s and then the political resistance shifted its force to civic causes.

Reviewing the present status of Korean civil society organizations, there were 4,023 civil organizations in Korea as of the end of 2000 with more than 20,000 local branches. About 20 percent of them were established in the 1980s, 56 percent in the 1990s; 56 percent of them are centered in Seoul; the average number of members is 6,284; average number of staff is 7.76. 54.4 percent of them are unregistered, 40.9 percent are incorporated, 7.7 percent are foundations and 0.9 percent are special corporations.

Among these civil society organizations, Citizens' Coalition for Economic Justice (CCEJ), YMCA, People's Solidarity for Participatory Democracy (PSPD), Korea Women's Association United (KWAU), Korean Federation for Environmental Movement (KFEM) and Green Korea United (GKU) are said to be the most influential organizations. CCEJ, YMCA and PSPD may be called general civil organizations as they work for diverse social issues. Specially, CCEJ which was founded in 1989 as the first of its kind, and PSPD, founded in 1994 claiming to be a progressive civil movement, are the representatives of Korean civil organizations in the 1990s.

On the other hand, the KWAU, KFEM and GKU are focusing on special issues such as environment or women's rights. Looking at this we see that there are a few general civil organizations, however, most others are special organizations with small members and structure.