Skepticism towards new consumer rights directive

A new EU consumer rights directive should make it easier for companies and consumers to trade across country borders. The directive has been under construction since 2008, but while it faces the final vote on March 23rd it is still looked upon with skepticism.

By Tatiana Tilly

He is self-employed and has recently started his own firm. The goal is to sell his product to foreign consumers over the internet. He had the idea that it would be the easy part, but he was wrong. He quickly realized that the consumers rights in the different EU countries are very different, so it would demand a lot of research for him to know his working conditions in the different countries.

This is an example on how the business conditions are today. But the European Parliament is working on a new consumer rights directive that should make it a lot easier to do business across borders of membership countries in the future. That is if they can agree on the very debated and changed consumer rights directive which will be voted on, on the 23rd of march.

Cut the red tape

As it looks today every EU country has its own rules when it comes to consumer rights. This can be an issue when companies want to expand and sell their products in foreign countries because the diversity of rules can become a barrier between company and consumer. Today it demands many resources for companies to work with the different rules, and at the same time it can be difficult for consumers to see through the terms.
If the EU parliament agrees on the directive both will become easier in the future.

In the press release that came with the presentation of the directive on October 8. 2008, it said:

“The aim is to boost consumer confidence and at the same time to cut the red tape which is holding back business within national borders – denying consumers more choice and competitive offers.”
But the directive has met criticism because it in some countries, such as Denmark, Germany and Finland, lowers the consumer rights standards on important areas.

Low expectations

The directive have been under construction for nearly three years now due to the fact that the directive have been criticized for lowering the standard for the consumers. The result is that the current directive has been changed in order to meet the national governments halfway.
Malcolm Harbour is chairman of the Committee on Internal market and Consumers Protection at the European Parliament. He hopes that it will be possible to reach an agreement with as much consensus as possible. Besides being chairman of the committee he is also Conservative and speaking on that behalf he admits that they have been keen to try and get a reasonable, fully harmonized package.
”We think that the biggest dividends will come from encouraging companies to do more cross-border business”, he says.
In the danish Association of Distance- and Internet Business (FDIH) they are skeptic towards the outcome of the negotiations.

“In a perfect world the harmonisation is a touchstone for us because it would make everything easier. But our belief in the fact, that they can make 27 membership countries agree on it, is very small”, says Henrik Theil, chief of communication.

In a perfect world

In theory Henrik Theil is very positive towards the principle of a harmonization due to the fact that it would open the market for their members so they could have 500 million possible customers instead of the danish 5 million. But he does not believe that the reality measures up.
“We can sit and clap in our hands when the European Parliament is saying that they want to harmonize, because it sounds good, but they should start by finding a way to enforce those rules.”

According to FDIH the difference between the quality of enforcement in the membership countries is too big. In the working process the commission made a study in the countries to get an impression of how good the consumers rights were in each of them. The study showed that 60 % of the danish companies selling technical goods did not live up to the rules in some ways, where the number was 0 % in Bulgaria. Henrik Theil believes you can find the explanation in the efficiency of the authorities.

“We support a harmonization, but we hope it will be considered how you can enforce it across country borders. Because that is what the companies in Denmark needs.”

Compromise is key
Exactly the differences between the 27 EU membership countries is the biggest obstacle when it comes to finding a legislation that is acceptable for all parts. After the first presentation of the directive many countries were skeptic. Therefore has each government prepared a report on the current standards and what consequences changes will have in the specific country. According to the danish MEP, Christel Schaldemose (S), it took the danish government approximately a year to do the report.

This is just an example on how complex the issue is and how difficult it will be for the European Parliament to reach an agreement. Chairman Malcolm Harbour has been in meetings about the consumer rights the past week.
“We have spent nearly three years working on this legislation and the same has all 27 governments. And every country wants to keep a particular point of their own legislation.

We are working here at the parliament but we are keeping an eye on the member states as well. Because if this is going any further we have to find a compromise.”

The mystery directive

The consumer rights directive has especially been criticised for lowering the standards in some country. A big part of the compromise is therefore to negotiate the standards. MEP Christel Schaldemose (S) is a member of the Committee of Internal Market and Consumers Protection and has been fighting for a directive that will not mean a total harmonization in the area of consumer rights but only in the area of product information. As a socialdemocrate she hopes that the directive will not lower the protection of the consumers.
Malcolm Harbour is positive to the outcome but admits that the directive, as it looks at this point, will still have negative consequences in some countries.
“It will only lower standards in minor ways. It is a matter of a couple of days when we talk about return right for instance. But I think on the other hand it will benefit consumers in terms of better choice on the internet.”

What the directive finally will look like is still a mystery until the 23^rd of march were the Parliament will vote.

 

 

 

Facts: The Consumer Rights directive

The consumers’ rights directive (KOM/2008/614/)
was first presented the 8. of October 2008 and contained a maximum level for all EU membership countries.

The goal with the original directive was to get total harmonisation of the consumers’ rights across national borders to make it easier for companies to do business on the single market.

The directive will be a replacement for the former four directives:

• Sale of consumer goods and guarantees (99/44/EC)
• Unfair contract terms (93/13/EC)
• Distance selling (97/7/EC)
• Doorstep selling (85/577/EC)

 

Source: http://ec.europa.eu/consumers/rights/cons_acquis_en.htm#directive

 

 

If Danish companies not make an effort in getting more women on boards, the EU Parliament will make a legislation, which forces companies to have at least 30% women on the board.

Text and photo by Maria Hesselvig Lange

8 March 2011 was the 100^th Anniversary of Women Rights Day and this also became the day where EU Justice Commissioner Viviane Reding started the race for more women on boards.

“We have waited 100 years to get only 12% women on boards in Europe. I will not wait 100 years more. Therefore we need to take action now,” she said.

France got women quotas in January, and Italy, Belgium and Holland are the next to follow. Countries who are not interested in the quotas will get one year to improve their percentage of women on boards, and after this Viviane Reding has threatened, that she will legislate in this area.

 

Denmark is far behind its neighbours

Boards in Denmark are still far behind when compared with Norway and France. Both countries have introduced women quotas, which means that they have increased the number of women on boards significantly and now stands at 30-40%. In Denmark the situation is different. We only have 10% women on boards. Even though the companies have tried to do an effort in bringing more women onto boards nothing have seemed to help. Therefore has EU Justice Commissioner Viviane Reding proposed that the European countries will get a last chance of improving their percentage of women on boards. This means that the companies will have until 8 March 2012 to hire more women to their boards.

“If the companies will not do an effort in improving, we have to legislate in this area. I will give the companies this last chance and I really hope they will improve. Otherwise women quotas will become reality,” says Commissioner Reding.

 

Danish Government against quotas

In Denmark, the word “quota” seems to be a frightening word. This is at least what the general opinion is in the Danish Government, where they are very much against women quotas, as they think that the quotas will do more harm than good.

The Danish MEP, Jens Rohde (ALDE), follows the opinion of the government:

“Quotas for women on boards are a really bad idea for businesses and for women. For businesses because they are forced upon something, which is inflexible, and for women because they risk being marginalized. The qualified women who come into the boards will risk being seen as part of a quota, which may not be particularly nice when you sit in a boardroom.”

Jens Rohde points out that instead of making quotas the companies should make a gender policy with their own set of rules.

The Danish Opposition is generally voting for the women quotas, but not all members of the party agree. Their MEP Christel Schaldemose (S&D) has another opinion:

“Precisely in relation to companies, I do not think that you should force them. What should the punishment be if they fail to meet quotas? I think there must be an extreme political pressure and a carrot in the end. The companies who actually choose women should be able to get some more funding or something. I favour the carrot and not the punishment, and I think we’ll have to work on this position in relation to businesses.”

The Opposition parties, The Socialist People’s Party and The Danish Social Democrats, have in an equality proposal suggested that all Danish publicly listed companies are obliged by law to have at least 40% women on the board. It must, according to the two parties happen to break stereotypes and traditions of the companies, which they believe prevents equality at management.

 

Danish Industry against quotas

The Confederation of Danish Industry (DI) is not thrilled about Viviane Reding’s proposal regarding women quotas, and they strongly hope, that quotas will not become a reality in Denmark:

“DI works with different initiatives to promote women in management, but we do not believe that quotas are a particularly good solution, because we believe that the companies knows what is best for themselves and therefore they ensure that the right skills are present at their boards to perform best. It is important that companies can make these decisions by themselves,” says Helle Rebien, course supervisor on diversity region of DI.

DI thinks that because the gender differences in the different lines of businesses are too big, the quotas will simply not work. They mention Grundfos as an example:

“Their boards is primarily held by engineers, and as we have very few female engineers in Denmark it will naturally be a problem to find a woman who is skilled enough to take the seat instead of a man. Quotas will simply be a problem. On the other hand, if you look at the pharma industry it will be much easier to have quotas because of the overweight of women represented in this industry. Here you do not have to compromise with qualifications,” says Helle Rebien.

 

Men choose men – not women

The society have waited a long time for a possible increase in the number of female leaders, now that women have a longer education than men, but this increase has not happened, and therefore experts conclude that something must be done.

“Quotas are controversial, but it is needed to do something. We cannot just sit and wait anymore. The alternative was that we could voluntarily change the image but nothing happened. We miss a lot of talent, and we cannot afford that in Denmark. Studies have shown that women influence the effectiveness positive because more men will want to seem well prepared, when women are present on the governing board,” says Professor in gender equality Anette Borchorst and adds:

“The reason why men do not really choose women is that they tend to choose some that are similar to themselves, and if women therefore are discarded because men choose men, there must of course be something done.”

 

Women quotas as last option

Britta Thomsen, Member of the Committee for Women’s Rights and Gender Equality, is an advocate of women quotas. In her opinion the quota is the only way we can improve our economy:

“We can not afford not to use the well-educated workforce we have in terms of women. Women are better educated than men. In fact, most women have a better education than men and we need to take advantage of this. Anything else would be stupid. Naturally the quotas should be seen as a last option, but if the companies do not get more women on the boards, the quota will become reality.”

EU Justice Commissioner Viviane Reding agrees:
“For me quotas are not the goal, for me they are the instrument to reach a goal if other instruments are not enough. I would very much prefer that we do not need targeted regulatory measures but rather self-regulation.”

 

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CLICK HERE to watch a video about women quotas