Background on ISO new work Item proposals for External Customer Dispute Resolution Systems and market-based codes of conduct  as of July 2002

The ISO Technical Management Board (TMB) has circulated two new work item proposals (NWIPs) on external customer dispute resolution systems and market-based codes of conduct which are out for vote to ISO members by September 20.  The subject proposals emanated from ISO's Consumer Policy Committee (COPOLCO) and its working group on Consumer Protection in the Global Market.  In both cases, COPOLCO recommended that the proposals be taken up and processed as International Standards.  At its June 2002 meeting, COPOLCO reiterated its support for both proposals and urged its members to work within their national bodies to encourage a positive vote in ISO.

ANSI's Consumer Interest Council (CIC) and ANSI's International Committee (IC) previously supported the advancement of these proposals within ISO, and therefore, ANSI staff recommends that ANSI submit votes of approval on these proposals.  In addition, ANSI staff recommends the allocation of both projects to ISO/TC 176/SC 3 for the reasons elaborated on below.

The NWIPs may be accessed at the following location on ANSI Online:  ANSI members are invited to comment on (1) whether ISO should approve these NWIPs and (2) what the preferred committee for their development should be.  Please send your comments by August 9, 2002 to the attention of James McCabe  This input will be provided to the IC which will determine the final ANSI position.

Additional Background

External Customer Dispute Resolution Systems

Noting that external customer dispute resolution systems are needed in those circumstances where customer complaints cannot be resolved through internal complaints handling processes, COPOLCO observed that dispute resolution schemes were being developed in a number of jurisdictions and that there was a need to set some criteria/benchmarks that establish key elements of effective schemes.  Ideally, such schemes would be suited to both online and offline conventional marketplace transactions.  At its May 2001, COPOLCO recommended that an International Standard be developed.

The ISO/TMB noted some similarity with the COPOLCO proposal on complaints handling now being developed by ISO/TC 176/ SC 3/WG 10, but there were different opinions as to whether the work should be addressed there or by another group.  Accordingly, TMB has asked the member bodies to comment whether, if the NWIP is approved, assignment should be made to ISO/TC 176/SC 3.

The Chair of the COPOLCO Global Market WG contends that the logical home for this work in ISO is ISO/TC 176/SC 3, Quality management and quality assurance, Supporting technologies, and WG 10 thereunder which currently is developing ISO/CD 10018 on Complaints handling (a proposal which also originated in COPOLCO).  The reasons are:

(1)  "internal complaints handling (ICH) and external customer disputeresolution (ECDR) are conceptually and logically linked since one engages in ECDR only when ICH fails;

(2)  both ICH and ECDR are intrinsic and important elements to ensurequality of a firm's products, services and operations. Both ICH and ECDR assist firms in identifying systemic quality problems and methods or

(3)  the WG is in the process of developing the substantive and procedural knowledge on how ICH and ECDR operate and the interconnection between them;

(4)  in turn, TC 176 also is in the process of developing a similar expertise at the institutional level;

(5)  since it is the decision of each individual firm, as part of its approach to ensuring quality, to adopt an ICH or ECDR approach which is compatible with its mission and operations, the ECDR standard is therefore an intrinsic component of a firm's ISO 9000 quality regime.  For example, this would operate in a similar manner to companies currently requiring that their suppliers meet ISO 9000 standards.  Indeed, firms would ask that their ECDR suppliers meet the ISO ECDR standard."

Apparently, the chair of ISO/TC 176/SC 3 is not supportive of allocation of the work to SC 3, noting that while complaints handling is a process that can be integrated into an organization's quality management system, externalcustomer dispute resolution systems are activities between parties and notwithin an organization.

Market-based Codes of Conduct

Noting that merchants and others are increasingly developing codes of conduct, and making claims about those codes of conduct to consumers,COPOLCO observed that to date there has been no internationally agreed set of criteria for the development, content and use of codes of conduct, with the result that both merchants and consumers alike have difficulty knowing which code claims are credible and verifiable and which are not.  COPOLCO considered it important to develop a set of essential criteria for effective codes developed by both demand and supply side interests in order to give consumers the confidence to deal with traders who comply with a code based on criteria established by a reputable and well recognized international body, i.e., ISO, and also to give guidance to merchants about how to develop effective and credible codes of conduct.

Accordingly, at its meeting in May 2000, COPOLCO recommended that an International Standard be developed.  Such a standard, when developed, would set criteria for codes of individual firms, as well as those at the sectoral level. Codes of conduct could pertain to single activities, or a wide range of activities.

Absent other compelling alternatives, ANSI staff is advocating the allocation of the codes of conduct project to ISO/TC 176/SC 3 for the reasons given by the COPOLCO Global Market WG chair in a communication to the ISO/TMB Secretariat, namely:  "Just as individual firms establish their own quality parameters through ISO 9000, so too would they establish their own codes through ISO 9000.  Since the codes are designed to enhance quality, and would be part of a firm's quality regime, a standard on codes should logically be housed in TC 176/SC3."

The ISO/TMB has invited comment from the member bodies on where to house this work if approved, for example: to assign it an existing committee, such as ISO/TC 176/SC 3, to establish a new technical committee dealing for example with consumer-related services, or to establish a working group reporting directly to TMB.  While there have been discussions by COPOLCO of the potential need for International Standards for services, there are currently no proposals for standardization on the table.  In staff's view, the codes of conduct proposal by itself does not warrant the formation of a new TC, so we would not be inclined to recommend supporting one.  Nor do we think that establishing working groups reporting to the TMB is an effective use of the TMB's time; indeed, it seems inconsistent with the purpose for which the TMB was created as an oversight body apart from the TC structure. Given the various alternatives, assignment to ISO/TC 176/SC 3 makes the most sense, and we believe ANSI should support that position


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