Vulnerable consumers of public utilities need more protection

06 July 2021

The economic and health crisis triggered by COVID-19 has put vulnerable consumers in a more precarious situation, leaving them unable to pay for essential household expenses.

A local woman in Lesuata, Timor-Leste. UN Photo/Martine Perret

Vulnerable and disadvantaged consumers are struggling to pay for basic utilities in the wake of job losses and reduced incomes caused by the COVID-19 pandemic.

Such consumers include poorer people, the sick, the elderly, people with disabilities, rural dwellers, and those with limited access to essential services such as energy and the internet.

UNCTAD’s intergovernmental meeting on consumer protection held on 5 and 6 July brought together experts and governments to examine how to better protect these consumers, who are in a more precarious situation due to the economic and health crisis triggered by COVID-19.

“The dire economic consequences of the pandemic compel us to address consumer protection needs, especially where people are more exposed and more at risk,” said UNCTAD Acting Secretary General Isabelle Durant during the meeting.

According to an UNCTAD report, the pandemic pushed between 119 and 124 million people into extreme poverty in 2020, with an additional 143 to 163 million people expected to follow in 2021.

Only 43% of the people in sub-Saharan Africa have access to clean and modern electricity, about half of the global electrification rate of 89% in 2017, according to the World Bank.

A wave of solidarity

“In the last year we have witnessed a wave of global solidarity among governments to protect consumers from becoming ever-more vulnerable,” said Teresa Moreira, head of competition and consumer policies at UNCTAD. “Ensuring access and inclusion in public utilities has been a priority for all.”

Government support measures include financial assistance to vulnerable households to pay their public utility bills and moratoria for providers to recover disadvantaged consumers’ debts. Authorities have also banned the disconnection of electricity, gas and water supplies to the neediest.

Consumer protection agencies have revamped their information and education campaigns to promote the efficient use of public utilities. They’ve also improved access to dispute resolution and redress mechanisms to resolve consumers’ claims faster.

Ms. Moreira said vulnerable consumers’ needs can only be adequately addressed through a suitable legal framework containing principles and obligations for public utilities service providers, such as universality, regularity, quality and affordability.

Beckoning the private sector

“Governments have a major responsibility to help vulnerable and disadvantaged consumers,” said Helena Leurent, director general of Consumers International. “But civil society and business must also do their share in building an inclusive and coherent environment that integrates support for these consumers across multiple sectors.”

The United Nations guidelines for consumer protection recommend good business practices that should be considered by public service providers at all times, especially when dealing with vulnerable and disadvantaged consumers.

“Voluntary commitments and ISO standards can go a long way in improving the welfare of vulnerable and disadvantaged consumers, especially in developing countries,” said Shivani Sothirachagan of Standards Malaysia, referring to global guidelines published by the International Organization for Standardization.

Way forward

UNCTAD urged governments to take three key actions to meet the needs of vulnerable consumers of public utilities:

  1. Engage in public policy discussions with all relevant stakeholders, including consumer and business organizations and research institutions, to identify the needs of vulnerable and disadvantaged consumers, avoiding one-size-fits-all approaches.
  2. Enact substantive legislation containing the rights of consumers and the obligations of public utilities service providers, considering the special needs of vulnerable and disadvantaged consumers.
  3. Regularly review and evaluate the impact and effectiveness of policy programmes to ensure the needs of vulnerable and disadvantaged consumers regarding public utilities are being met.