Taking Stock / Unfair trade
Twenty months have passed since the former industry minister, Ehud Olmert, slashed the budget of the Consumer Affairs Council and accepted the resignation of its head, Galit Avishai, who complained that Olmert was biased toward business at the expense of consumers. And yesterday the cabinet decided to set up a body to find a chief for a new organization meant to come into existence: the Consumer Protection and Fair Trade Authority.
One might imagine that all is ending well. Instead of a toothless Consumer Affairs Council, Israel will have an entire authority devoted to fair trade. Unlike its predecessor, surely it will be able to truly advance the cause of consumers: the Consumer Affairs Council had been impotent and it had been subject to a ministry - Industry - that has mainly the interests of big business in mind. Surely the fair trade authority will be more independent and powerful, along the lines of the Antitrust Authority or the Israel Securities Authority. Right?
Israel has a screaming need for a muscular body to protect consumers. The Antitrust Authority, which became a power to reckon with about 15 years ago, constantly finds itself contending with issues of market structures that affect competition and service to customers, and the like. But the Antitrust Authority's mandate is confined to relationships between businesses, and cartels and other forms of illegal dealmaking, not relationships between business and consumers.
From time to time, this or that government body, for instance the Supervisor of Banks, gets sucked into the void between business and consumer. In that case, the result has been new rules governing overdrafts and bank fees. But such government supervisors have an inherent conflict of interest. Take the commissioners at the Bank of Israel and Finance Ministry, who are also responsible for maintaining the financial stability of the banks and insurance companies.
During the last three years, a lively debate has arisen over "social" issues. For the most part, the debate is about welfare budgets and policies intended to urge people to work. Setting up a strong, independent fair trade authority would send a very strong social message. The markets that it would oversee are no lesser in scope than the markets that the Israel Securities Authority and Antitrust Authority supervise, and their problems are no less grave.
Meanwhile, it appears the Industry and Trade Ministry is entertaining the terrible idea of appointing one of its own officials to lead the new fair trade authority.
The nascent authority's very success depends primarily on its being completely independent. To be that, it must be led by a strong, completely independent professional. In recent years, the independence of several key authorities has eroded under the hammering of powerful political and economic interests.
Olmert's elimination of the Consumer Council conforms with his image as a cigar-chomping friend of Big Business. He himself has never been ashamed of his affection for the rich and powerful, and has often stated clearly that he sees his role as lying in the promotion of their interests.
The present Industry minister, Eli Yishai, like so many of his colleagues in Shas, styles himself as the champion of the downtrodden, the people preoccupied with day-to-day survival, who have no ready access to the halls of power.
If Yishai wants to advance their interests, he shouldn't settle for the usual demands to increase dubious government allowances. He should bear the banner of the consumers.
He should start by appointing a strong, reputable chairman to the consumer watchdog body. His second move should be to establish a mechanism giving the authority power over financial institutions, which are presently overseen by the Bank of Israel and the Finance Ministry, bodies that are also responsible for assuring these institutions' stability.
The third move should be to declare victory. Victory of the consumers, now protected by a strong authority; and victory for Eli Yishai, who by these moves will have proved that he cares for more than his voters: He cares for Israel's seven million consumers.