Review of the effectiveness and validity of operations of the MAIF Agreement:Research Paper

5.2 How effective is the APMAIF in monitoring industry compliance with the MAIF?

Page last updated: 18 June 2012

Recommendations
5. The APMAIF’s monitoring role should be expanded from a purely reactive monitoring role to also encompass a proactive approach that actively monitors compliance. Its functions and powers should be changed in the following ways:
a. to be able to initiate an investigation on its own
b. to receive direction from the Minister to investigate a particular matter
c. to require signatories to publically advertise a breach finding made against it in a prominent position on its website, a national newspaper and other relevant health sector publications as determined by the APMAIF.

6. The APMAIF should publish its decisions (and reasons for the decision) on all complaints (having regard to complainants’ and commercial confidentialities) on the DOHA website.

7. The currency of the MAIF Agreement should be reviewed regularly through:
a. an external review every five years of the efficiency, effectiveness and appropriateness of the MAIF Agreement
b. annual reviews of the coverage and effectiveness of interpretive guidelines.

8. The APMAIF should promote community and health care professionals’ awareness of the MAIF Agreement and the complaints process through:
a. development of a website that supports information dissemination and lodgement of complaints
b. education and general media events.

9. The APMAIF should continue to maintain strong formal and informal communication channels with industry to ensure a consistent understanding and interpretation of the MAIF Agreement and to play an education role following breaches.

10. The APMAIF should introduce the following changes to improve the efficiency of the complaints handling process:
a. design and implement an APMAIF service charter that sets out KPIs on service obligations including targets for timeliness of responses to complaints
b. increase the use of out-of-session meetings and other flexible working arrangement to improve the timeliness of its decisions.

11. An appeals process should not be introduced for complaints.

5.2.1 Timeliness and divergent APMAIF member views are key concerns amongst stakeholders

Review questionInsights
What are stakeholder views on the strengths and weaknesses of the operations of the APMAIF?
  • Stakeholders valued the complaints process being undertaken by an independent body.
  • A strong and appropriate relationship exists between the APMAIF and industry members.
  • Ideological differences between APMAIF members creates conflict and the roles of industry and consumer representatives on the APMAIF need to be clarified.
  • Stakeholders identified that APMAIF processes could be more timely.

Both interviewed stakeholders and general survey respondents indicated that a key strength of APMAIF operations is the existence of an independent mechanism for handling complaints. Some general survey respondents also suggested that the APMAIF provides an effective liaison point between government and industry members.

The five key strengths of APMAIF operations identified by targeted stakeholders through interviews and surveys are outlined in Table 11 below. A comprehensive list of identified strengths can be found in Appendix F.

Table 11: Key strengths of APMAIF operations - targeted stakeholders

Strengths identified by targeted stakeholdersAPMAIF membersGovernment organisationsIndustry signatoriesConsumer Groups
Complaints process: The current process for effective complaints investigation places Australia ahead of many other countries. The complaints process is accessible to complainants (e.g. complaints can be accessed online). Low PriorityHigh PriorityLow Priority
Industry compliance: Industry members are aware of the MAIF Agreement and it is in their best interest to work effectively with the APMAIF; Signatories take the APMAIF seriously and commit significant resources to ensure compliance; Industry recognises the impact of a breach upon global branding. Low PriorityLow PriorityLow Priority
Collegiate approach: Strong relationships exist between the APMAIF and Industry (meet once per year and one representative on the APMAIF); Capacity for the APMAIF to be informed about industry; good consultation with Industry about complaints. Complaints process includes an education / negotiation strategy which provides companies with the opportunity to respond to breaches. Low PriorityLow PriorityHigh PriorityLow Priority
Independence/ objectivity: the APMAIF is an independent body to the Government and investigates complaints objectively. Low PriorityLow PriorityLow Priority
APMAIF composition: There is a good representation of stakeholders on the APMAIF and appropriate mix of knowledge and skills. The variety of expertise enables an accurate assessment of complaints to be made and appropriate responses developed.Low PriorityHigh Priority
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Stakeholders also identified a number of key weaknesses in APMAIF operations. Some interviewed stakeholders expressed concerns regarding the disparate views of some APMAIF members and potential conflicts of interest arising from inclusion of an industry representative on the APMAIF. This was supported by several general survey respondents, who expressed concern that inclusion of industry does not permit processes to be sufficiently independent from infant formula manufacturers.

The timeliness of APMAIF processes was also identified as a key area requiring improvement. Some interviewed stakeholders suggested that the collegiate approach adopted by the APMAIF in consulting industry is, by nature, a slow process. Additionally, long periods of time between APMAIF meetings mean complaints take a long time to resolve, development of guidelines is slow and APMAIF is slow to provide responses to complainants.

Both interviewed stakeholders and general survey respondents also identified the lack of substantial penalties for breaching the MAIF Agreement as a key weakness. Some general survey respondents felt that the APMAIF should have legislated powers to ensure compliance with the MAIF Agreement. One interviewed stakeholder indicated that over time the decisions and interpretations of APMAIF has weakened the MAIF Agreement.

The five key weaknesses identified by targeted stakeholders through interviews and surveys are identified in Table 12. A comprehensive list of identified weaknesses can be found in Appendix F.

Table 12: Key weaknesses of APMAIF operations

Weaknesses identified by targeted stakeholdersAPMAIF membersGovernment organisationsIndustry signatoriesHealth professionals/ organisationsConsumer Groups
APMAIF views: Ideological differences between APMAIF members create conflict. APMAIF members should be aware of their collective responsibility and work towards the aim of the MAIF Agreement and the APMAIF’s Terms of Reference. The role of the industry representative on the APMAIF needs to be clarified due to potential conflicts of interest and concerns that the influence of industry may be too strong. High PriorityLow PriorityLow PriorityHigh PriorityLow Priority
Enforcement: The MAIF Agreement cannot be enforced and there are no significant consequences for breaches. The APMAIF does not have power to censure those in breach except for naming in the annual report. Low PriorityHigh PriorityLow Priority
Timeliness: Many processes take a long time – there are long time periods between meetings; development of guidelines is a slow process and the collegiate approach adopted takes a long time. Low PriorityLow PriorityLow PriorityLow PriorityHigh Priority
Monitoring – the APMAIF does not take a pro-active role in the monitoring of industry and breaches, relying on individuals to report breaches to be investigated. Suggested mechanisms for active monitoring include surveys or audits (see Section 5.4.1 for discussion of APMAIF Terms of Reference).High PriorityLow PriorityLow Priority
Transparency of complaints handling process – Concerns regarding the transparency of the decision-making process. Reports are not made public on a regular basis and information on the APMAIF website is dated. Interpretation of the MAIF Agreement is currently at the discretion of APMAIF members. High PriorityHigh Priority

5.2.2 There are mixed levels of understanding of the interpretation and application of the MAIF Agreement by the APMAIF

Review questionsInsights
What are i) stakeholders’ levels of awareness and understanding of the interpretation and application of the MAIF Agreement through the APMAIF, ii) stakeholder views of the interpretation and application of the MAIF Agreement?There is generally a strong level of awareness and understanding of the interpretation and application of the MAIF Agreement. Levels of awareness amongst consumers and health professionals could be improved

Survey results indicated that there is strong awareness and understanding of the interpretation and application of the MAIF Agreement by the APMAIF across all targeted stakeholder groups except health professionals (where one of three respondents agree they have a good awareness and understanding).

There was a mixed result from the general survey (n=472). The strongest level of understanding and awareness was amongst consumer groups (89%) and the lowest level was amongst consumer respondents (51%). Results for different stakeholder groups are shown in Figure 6 below.

Figure 6: Survey statement: “I have/my organisation has a good awareness and understanding of the interpretation and application of the MAIF Agreement by the APMAIF” – results from general survey (n=472)

Figure 6 is a stacked bar chart depicting the results of a question in the general survey. The data represented in the chart is also included in the additional table below.


Consumer (n=299)
Consumer group (n=27)
Health professionals/ organisations (n=133)
Other (n=13)
Strongly disagree (%)
7%
0%
8%
15%
Disagree (%)
22%
4%
21%
15%
Agree (%)
39%
59%
49%
31%
Strongly agree (%)
12%
30%
14%
23%
Unsure (%)
20%
7%
9%
15%


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Amongst health professionals/ organisation respondents from the general survey, 63% indicated that they have a good awareness and understanding of the interpretation and application of the MAIF Agreement. This represented a reasonably low understanding amongst a stakeholder group that is expected to have high levels of awareness and understanding of the MAIF Agreement. Additionally, results indicated a low level of awareness amongst consumer respondents. These results support earlier findings (see Section 5.1.2) which indicated that there is a limited level of awareness and understanding amongst health professionals and the broader community.

5.2.3 The complaints handling process is sufficiently fair and does not warrant introduction of an appeals process

Review questionsInsights
What is the i) fairness, efficiency, transparency and effectiveness of the APMAIF complaints handling process (from the perspectives of both the consumer / complainant and companies) and ii) the potential value of an appeals process?

What is the level of participant satisfaction with the structure and efficiency of the APMAIF’s complaints process (including both complainants and signatories)?

  • Greater transparency of decisions and the underlying rationale is required
  • A more timely response to complaints by the APMAIF is required
  • Sufficient procedural fairness in the current complaints handling process means an appeals process is not warranted

Key elements of the Complaints Handling Process:

  • All complaints received are registered by the APMAIF Secretariat. The complaints register and complaint statistics are provided at each APMAIF meeting for the Panel’s review
  • Complaints are classified as within or outside the scope of the MAIF Agreement by the APMAIF Secretariat. Classification of a complaint is confirmed with the Director, Early Childhood Nutrition Section of DoHA and the APMAIF Chair.
  • The Secretariat advises the complainant in writing that their complaint is outside the scope of the MAIF Agreement and the reason/s for this classification
  • All complaints within scope of the MAIF Agreement are considered by the APMAIF
  • Companies are informed is there is insufficient information to determine that there has been no breach and are invited to respond
  • If an ‘In Breach’ decision is made by the APMAIF:
    • both the company and complainant are advised of the outcome and reason;
    • the Parliamentary Secretary to the Minister for Health and Ageing is advised that there has been a breach and the reason;
    • the ‘In Breach’ decision is recorded in the APMAIF Annual Report.
As part of the Review stakeholders were asked about the fairness, efficiency, transparency and effectiveness of the APMAIF complaints handling process. Amongst targeted stakeholders, seven respondents indicated that they have been involved in the complaints handling process. 102 general survey respondents indicated that they have previously been involved in the complaints handling process. Results are discussed below.

Fairness

Amongst targeted stakeholders who have been involved in the complaints handling process (n=7), 86% agreed that the complaints handling process is fair.

Results from the general survey reveal that 66% of consumer respondents and 55% of health professionals/ organisations who have been involved in the complaints handling process disagreed or strongly disagreed that the APMAIF complaints handling process is fair (there were insufficient responses from other stakeholder groups to provide a reasonable analysis of results).

Most interviewed stakeholders identified that there is sufficient procedural fairness in the current complaints handling process. In cases where the APMAIF finds there is insufficient information to make a determination, industry representatives are provided with adequate opportunity to respond to complaints prior to any decisions being made.

One stakeholder proposed that the inclusion of an appeal process would make the process more transparent and industry more accountable, but was unlikely to be timely.

Efficiency

Amongst targeted stakeholders who have been involved in the complaints process (n=7), 71% agreed that the complaints handling process is efficient. Amongst general survey respondents who have been involved in the complaints handling process (n=102), more than 65% of respondents from each respective stakeholder group did not think that the current process is efficient.

In particular, both interviewed stakeholders and general survey respondents identified that the timeliness of the complaints handling process could be improved. Many general survey respondents expressed concerns regarding the level of responsiveness of the APMAIF to complaints and the need for complaints to be determined and communicated within specified timeframes. In particular, stakeholders identified that complainants need to receive timely responses about the receipt of complaints, outcome of the process and the response provided by the relevant manufacturer. Suggestions included the use of an accessible online complaints tracking system or providing complainants with an estimated time until adjudication of their complaints. Some interviewed stakeholders also indicated that improvements could be made to the timeliness of developing guidelines.

Analysis of complaints data provided by the APMAIF Secretariat indicated that the majority of out-of-scope complaints were completed within a few days. The longest time taken for the APMAIF Secretariat to send an out-of-scope letter was nine business days (2010-11). In 2010-11 there were two in-scope complaints- one does not have a logged completion time (although it is assumed it was closed in 2010-11 as no complaints were carried forward); the other took approximately three and a half months to complete (late September 2010 to early January 2011)
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Table 13 shows that in 2009-10, six of the seven new in-scope complaints were carried over into the next reporting period.

2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
Carried forward
15
38
82
0*
4
6
0

* Not recorded but from the available data appears to be zero.

There is value to both consumers and industry in the timely resolution of complaints. The APMAIF undertakes a rigorous complaints investigation when a complaint is deemed to be in-scope. While every complaint will require different lines of enquiry, there are several elements of the process that will be similar to every enquiry. While the complaints data does not conclusively indicate that the APMAIF decision making process is unreasonably slow, the process could be better communicated to stakeholders. Development of a specific timeframe within which decisions are made would provide stakeholders with clarity on timing and alleviate concerns regarding the timeliness of decisions. Improved timeliness of decisions can provide the benefits of increasing consumer protection by facilitating compliance with the MAIF Agreement and provide signatories with certainty in their obligations under the MAIF Agreement.

Transparency

More than 50% of respondents from the both the targeted and general survey indicated that there is a lack of transparency in the complaints handling process:
    • 57% of targeted stakeholders who have been involved in the complaints handling process (n=7) disagreed that the current process is transparent
    • 55% of health professionals/ organisations and 72% of consumer respondents from the general survey who have been involved in the complaints handling process disagreed or strongly disagreed that the complaints handling process is transparent (there were insufficient responses from other groups to conduct an analysis of results).
Interviewed stakeholders identified increased transparency of breaches and APMAIF decision making processes as a key improvement required for APMAIF operations. Some interviewed stakeholders suggested that case-studies of breaches and non-breaches could be provided to industry members to aid wider learning and understanding of interpretations. This was supported through survey results, with respondents from both the targeted and general survey indicating that greater transparency in the complaints handling process is required.

Improvements to the transparency of decisions will provide greater clarity about the interpretation of complaints and will help maintain stakeholder confidence in the integrity of the complaints handling process. Although the APMAIF provides a summary of its complaint findings in its Annual Report, it does not publish full decisions. Both interviewed stakeholders and general survey respondents suggested that the current process could be improved by publically broadcasting decisions and supporting rationale (e.g. providing a summary of complaints online). Interpretations of the MAIF Agreement by the APMAIF should be easily accessible to the public and a systematic approach for dealing with out-of-scope complaints established.

General survey respondents also suggested better explanations need to be provided to complainants outlining the reasons why the APMAIF or the Secretariat dismissed their complaint and all complaints should be clearly identified to industry members. The current out-of-scope letter provided by the Secretariat to complainants offers a limited explanation for why the complaint was considered out-of- scope. The provision of more detailed explanations is likely to increase confidence in the process.

Effectiveness

Amongst targeted stakeholders who have been involved in the complaints process (n=7), 71% agreed that the overall complaints handling process is effective.

Amongst general survey respondents, health professionals/ organisations and consumer respondents had the highest number of respondents that have been involved in the complaints handling process (42 and 53 respondents respectively). Amongst these respondents, 83% of consumers and 79% of health professionals/ organisations disagreed or strongly disagreed that overall the complaints handling process is effective.

Some general survey respondents suggested that increasing public awareness of the MAIF Agreement, the role of the APMAIF and the complaints handling process may result in an increase in the number of complaints submitted. A couple of stakeholders (both targeted and general survey respondents) indicated that the current process for lodging complaints is cumbersome as complaints cannot be submitted electronically. Suggested methods for improvement include increasing the web presence of the APMAIF and allowing complaints to be lodged online.

Despite mixed responses regarding the effectiveness of the complaints handling process, the majority of targeted and general stakeholders were supportive of the current structure of the process. . Amongst targeted stakeholders (n=7), 86% agreed that the process has an appropriate structure. Amongst general survey respondents, 64% of consumer respondents and 72% of health professionals/ organisations indicated that the current structure of the APMAIF complaints handling process is appropriate (insufficient responses were received by other stakeholder groups to conduct an analysis of results).

Value of an appeals process

The current APMAIF complaints handling process is viewed by many stakeholders as sufficiently fair and robust relative to its powers and functions. The majority of interviewed stakeholders indicated that an appeals process would impose unreasonable cost and complexity. Key rationales presented by stakeholders for not establishing an appeals process included:
  • The current process has sufficient procedural fairness and provides industry with adequate opportunity to contribute to the process (as discussed above)
  • Introduction of an appeals process will not add enough additional value to the current complaints handling process to warrant the extra time, cost and work required. New Zealand currently have an appeals process whereby complaints unresolved by the Compliance Panel are presided over by an adjudicator. It was noted that this is not an appropriate model to follow as there is a tendency for all complaints to be investigated in great detail, leading to inefficient use of time and money.
  • The self-regulatory nature of the MAIF Agreement means there is no value in appealing to another regulatory panel unless they have greater punitive powers than the APMAIF.
  • Establishment of an appeals process will add an unnecessary layer of complexity (as it will require decisions to be made about the size, composition and technical expertise required for the appeals panel).
Three stakeholders indicated that there may be value in the development of an appeals process. The main reason suggested for introducing an appeals process was to improve the transparency of the complaints handling process. It was also suggested that an appeals process may increase the accountability of manufacturers and importers. One stakeholder noted that although breaches are reported in the APMAIF Annual Report, there was a three year period when no report was published (2004-2007).

The potential value of an appeals process does not warrant the additional complexity, cost and time required. As such, provided the APMAIF decisions and processes are independent and objective, an appeals process is not warranted. To maintain stakeholder confidence in the integrity and objectivity of the complaints handling process, the process should also remain open and transparent to stakeholders. To maintain this transparency, the Annual Report needs to be consistently published on an annual basis and include all relevant complaints and breaches data.
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Development of a service charter

The range of survey responses indicated that there is scope to improve both the efficiency and transparency of the APMAIF processes. This Review recommends the introduction of an APMAIF service charter that should include key performance indicators (KPIs) on service obligations. For example, the service charter would outline indicative timeframes for different processes. The Review further recommends that a report card be developed against the service charter KPIs and that the outputs are included in the APMAIF Annual Report.

There is value to both consumers and industry in the timely resolution of complaints. It increases consumer protection by facilitating compliance with the MAIF Agreement, and it provides signatories with certainty in their obligations under the MAIF Agreement. A well designed and implemented service charter would help achieve this.

5.2.4 The effectiveness of the APMAIF in monitoring and influencing industry behaviour can be improved

Review question
What is the effectiveness of the APMAIF’s monitoring and influencing of industry behaviour?

Insight

  • Some stakeholders indicated that the APMAIF could be more pro-active in monitoring breaches.
  • There was concern amongst some stakeholders that current penalties for breaching the MAIF Agreement are not a strong enough disincentive.
Some interviewed government representatives suggested that the APMAIF could be more pro-active in the monitoring of industry activity. In particular, it was suggested that the APMAIF could initiate the investigation of complaints rather than wait for complaints to be received. It was also suggested that the APMAIF could actively educate the public about the complaints handling process. One interviewed consumer group stakeholder indicated that over time the decisions and interpretations of the APMAIF have weakened the requirements of the MAIF Agreement.

Many interviewed government representatives, consumer groups and some APMAIF members indicated that the current ‘name and shame’ approach to dealing with companies in breach of the MAIF Agreement does not provide a strong enough disincentive for manufacturers operating as corporate entities. The APMAIF does not have any significant powers of enforcement except for naming companies in the Annual Report. Some stakeholders suggested that companies in breach of the MAIF Agreement should be publically named (e.g. in the national media).

Amongst targeted stakeholders (n=17), there was a mixed response regarding the effectiveness of the APMAIF’s monitoring and influencing of industry behaviour. 30% of respondents either agreed (18%) or strongly agreed (12%) that the APMAIF is effective, whilst 47% disagreed (29%) or strongly disagreed (18%) with this statement. Health and consumer group respondents were the main groups who expressed disagreement with this statement.

Results from the general survey (n=472) indicated that the majority of respondents across stakeholder groups disagree that the APMAIF’s monitoring and influencing of industry behaviour is effective. 65% of consumers (n=299), 71% of consumer groups (n=27) and 70% of health professional/ organisations (n=133) expressed disagreement.

Pro-active monitoring of industry activity by the APMAIF may significantly impact the effectiveness of the MAIF Agreement. Pro-active monitoring may increase the awareness of the APMAIF - and in turn the MAIF Agreement - in the community, resulting in a stronger public profile and ability to positively influence industry compliance. Whilst many investigations of complaints will remain reactive, there is scope within the current APMAIF Terms of Reference for more pro-active monitoring of industry behaviour. This would require a change to the current remit and practice of the APMAIF, which relies on the receipt of complaints prior to commencing investigations. Expanded APMAIF functions to enable more proactive activity means the APMAIF will be able to initiate an investigation on its own or investigate a particular matter following direction from the Minister. The appropriateness of current APMAIF Terms of Reference are discussed in more detail in Section 5.4.1.

The effectiveness of the APMAIF in influencing industry behaviour could also be improved through stronger disincentives for breaching provisions of the MAIF Agreement (e.g. greater dissemination of Annual Reports or public naming of companies considered in breach of the MAIF Agreement). Publicising breaches and complaints will result in greater public awareness of industry activities, making companies more publically accountable for their decisions. It should be noted however that the right balance needs to be achieved to ensure stronger monitoring does not deter industry participation.

Future reviews

This Review recommends that an external review of the efficiency, effectiveness and appropriateness of the MAIF Agreement be completed every five years. It also recommends that annual reviews of the coverage and effectiveness of interpretive guidelines be completed

It is best practice to undertake regular reviews of regulatory instruments. A five year period will allow sufficient time for the Australian Government to consider the recommendations of this Review, implement its response and allow enough time for any new arrangements to operate prior to the commencement of the next review.

Given the rate of change in the infant formula marketing environment, it is important that interpretive guidelines are regularly reviewed and updated. This Review recommends that such reviews are completed annually to ensure that the guidance is appropriate and that signatories are well supported to remain compliant.
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