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The Singapore Government has recently announced that a self-regulatory regime will regulate the advertising of food to children. There have been ongoing discussions between industry organisations, the Singapore Ministry of Health and associated Health Promotion Board as to the best way to regulate the advertising of food and beverages to children. There has also been extensive consultation with various stakeholders.
New advertising guidelines will be incorporated in the Singapore Advertising Code of Practice and will take effect from January 2015. The Advertising Standards Authority of Singapore will administer the Guidelines.
Included in the Guidelines will be uniform nutrient criteria. Only food and beverage products that meet the criteria may be advertised to children.
The International Chamber of Commerce (ICC) has released its ‘Framework For Responsible Marketing Communications of Alcohol’. The Framework takes the Consolidated ICC Code as a base and then interprets it Article by Article as it applies to alcohol advertising.
Most of the Framework deals with the interpretation of social responsibility – something that is difficult to define in black letter law contained in statutory regulation. One of the key advantages of self-regulatory codes is that it is easier to define social responsibility.
This Framework will be of great assistance for jurisdictions that are considering upgrading their regulation of alcohol advertising.
The Framework can be found at http://www.codescentre.com/media/12670/icc-alcohol-framework_final_march2014.pdf
Further information on the Framework is at http://www.iccwbo.org/News/Articles/2014/New-ICC-Framework-clarifies-do%E2%80%99s-and-don%E2%80%99ts-for-responsible-marketing-of-alcohol/
It is not well known but many countries have guidelines that should be followed before any legislation or regulation is enacted. When advertising regulation is proposed the procedures that should be followed are often overlooked.
he USA has the 12 Principles of Regulation that are issued by the White House and have been renewed with minor modifications by successive Presidents. Australia has 8 Principles of Best Practice Regulation promulgated by the Council of Australian Governments (COAG). New Zealand has the New Zealand Code of Good Regulatory Practice issued by the Ministry of Business Development & Employment. There is a remarkable similarity of all three documents with emphasis on efficiency, effectiveness, transparency and equity.
There are also APEC best practice guidelines – the APEC Guidelines for the Preparation, Adoption and Review of Technical Regulations that apply to the 21 APEC member countries/economies.
Key Guidelines for Advertising Regulation
Barrier to trade
The underlying objective of the APEC Guidelines is the elimination of barriers to trade. Design of the regulation is therefore important, as it should minimize “the constraints on the ability of firms to enter and exit the market”.
The right to advertise is not absolute but is subject to fetters. The objective of the fetters is to ensure there is fair competition and that consumers are properly protected. As an example a key fetter is that advertising must be truthful and not mislead. This fulfills both purposes of enhancing fair competition and protecting consumers. However fetters improperly used can be a blunt instrument and become a barrier to trade – such as selective ad bans on particular products or for certain media.
Problem Identification and Policy Objectives
The APEC Guidelines list this issue as a basic starting point –
“The first step in the development process should be to clearly identify the problem that needs to be addressed. … legitimate reasons for imposing technical regulations are:
- national security requirements;
- the prevention of deceptive practices; and
- protection of human health or safety, animal or plant life or health, or the environment.”
Care therefore needs to be taken that any proposed advertising regulation meets at least one of these policy objectives. Also the proposed regulation should not be an ad hoc good idea but supported by evidence rather than personal viewpoint. Care also needs to be taken that the evidence is clear after taking into account all sides of the debate. On many of the current ‘hot’ advertising issues the evidence is contestable and at best equivocal.
Assessing Regulatory Options
This is a crucial consideration. A range of regulatory and non-regulatory options is available for Governments.
The APEC Guidelines are detailed and specific – “In order to ensure that any government intervention brings the greatest possible net benefits, it is important to ensure that all the feasible options are identified and assessed. In addition to the imposition of technical regulations, there are a number of policy instruments available which should be considered.
Such alternatives could include:
- status quo
- reliance on general law
- educational programmes
- voluntary standards
- economic instruments (taxes, tradeable property rights)
- insurance and liability laws
- codes of conduct/practice
- industry self regulation and co-regulation”
The options of self-regulation, codes and other non-regulatory options are also mandated in other Guidelines.
– The Second Principle of the Australian COAG 8 Principles of Best Practice states, “A range of feasible policy options must be considered, including self-regulatory, co-regulatory and non-regulatory approaches, and their benefits and costs assessed.”
– The New Zealand Code for Good Regulatory Practice states, “Consideration of alternatives to regulation: Regulatory design should identify and assess the most feasible regulatory and non-regulatory alternative(s) to address the problem.”
– The Third Principle of the US Principles of Regulation states, ”Each agency shall identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.”
The chosen regulatory or non-regulatory action should be cost-effective and every option should be measured to assess its impact. The APEC Guidelines state, “In deciding whether to impose a technical regulation, consideration must be given to the various alternative mechanisms available to overcome the problem. When assessing the alternatives, any constraints (ie. legal or fiscal constraints) should be clearly identified. Each option should then be considered carefully in terms of costs and benefits. The option chosen should be the option which either provides the maximum net benefit or the least net cost to society.”
From a Government perspective best practice advertising self-regulatory systems are generally considered to be the most cost-effective as there is nil cost. If there is a cost it is ensuring that the system adheres to best practice. Additionally around the globe advertising self-regulatory regimes have consistently demonstrated that they effectively regulate advertising providing they follow best practice principles.
The APEC Guidelines state “that members should adopt international standards or the relevant parts of them, as the basis for the technical regulation”. This is most relevant for advertising regulation. The base standard for advertising codes is the ICC Code of Advertising and Marketing that has been in existence since 1937. Self-regulatory systems with rules based on the ICC Code are operating in over 35 countries, across 6 continents. The Code and the best practice self-regulatory systems in existence constitute the world standard.
There are further guidelines on other matters including consultation, compliance, monitoring, review and performance standards but this discussion focuses on those relevant to advertising. If best practice regulation procedures are followed there should be a Regulatory Impact Assessment that would cover the matters covered by the Guidelines. In particular it should analyze various impacts including economic costs, reduced competition, reduced innovation, reduced consumer choice and the impact on jobs.
In summary, the APEC Best Practice Regulation Guidelines provide a legal pathway that should be followed when regulation of advertising is proposed.