Cooperativismo y Desarrollo, May-August 2020; 8(2), 197-212
Translated from the original in Spanish
Protection to consumer in non-agricultural and livestock cooperatives. Approach to a case study
La protección al consumidor en las Cooperativas no Agropecuarias. Aproximación a un caso de estudio
Proteção ao consumidor em cooperativas não-agrícolas. Abordagem a um estudo de caso
Yoandry Cruz Montesino1, Reinier Bosmenier Cruz2, Sandys Menoya Zayas3
1 Universidad de Pinar del Río "Hermanos Saíz Montes de Oca". Facultad de Ciencias Sociales
y Humanidades. Departamento de Derecho. Pinar del Río. Cuba. ORCID:
http://orcid.org/0000-0003-2850-7420. Email: email@example.com
2 Universidad de Pinar del Río "Hermanos Saíz Montes de Oca". Facultad de Ciencias Sociales y Humanidades. Departamento de Derecho. Pinar del Río. Cuba. ORCID: https://orcid.org/0000-0003-4691-3932. Email: firstname.lastname@example.org
3 Universidad de Pinar del Río "Hermanos Saíz Montes de Oca". Facultad de Ciencias Sociales y Humanidades. Departamento de Derecho. Pinar del Río. Cuba. ORCID: https://orcid.org/0000-0002-3249-7248. Email: email@example.com
Received: April 13th, 2020.
Accepted: May 7th, 2020.
Non-agricultural and livestock cooperatives are a novel economic and social organization in the Cuban context, created on an experimental basis to satisfy the needs of the society, to re-organize services and productive processes, and to relieve the State of non-essential economic activities. Consumers during the act of consumption of goods and services in these associative forms are unprotected in front of the absence of mechanisms for consumer protection, which results in an infringement of their rights as consumers. The present article aims at evaluating the state of consumer protection in non-agricultural and livestock cooperatives in the province of Pinar del Río through the study of one of the gastronomic service cooperatives in Pinar del Rio municipality. The research used theoretical methods such as analysis-synthesis and techniques typical of empirical methods, such as documentary analysis, interview and observation. It concludes that there is a need to develop mechanisms or systems for protection to the consumer in non-agricultural and livestock cooperatives, especially those that provide direct services to consumers and do not have adequate cooperative education or a culture of quality and customer service. Based on this, a set of actions is proposed which, in the case study, can positively contribute to the design and application of a consumer protection system and, therefore, to the satisfaction of current and potential consumers.
Keywords: non-agricultural and livestock cooperatives; rights; protection to consumer; gastronomic services
Las cooperativas no agropecuarias son una organización económica, social y novedosa en el contexto cubano, creada de manera experimental para satisfacer necesidades de la sociedad, reorganizar servicios y procesos productivos y descargar al Estado de la realización de actividades económicas no esenciales. Los consumidores durante el acto de consumo de bienes y servicios, en estas formas asociativas, se ven desprotegidos ante la ausencia de mecanismos de protección al consumidor, lo que provoca una vulneración de sus derechos como consumidores. El presente artículo tiene como objetivo evaluar el estado de la protección al consumidor, en las cooperativas no agropecuarias del comercio en la provincia de Pinar del Río, a través del estudio de una de las cooperativas de servicios gastronómicos del municipio cabecera del referido territorio. En la investigación, se emplearon métodos teóricos como el análisis-síntesis y técnicas propias de los métodos empíricos, tales como el análisis documental, la entrevista y la observación. Se concluye que es necesario el desarrollo de mecanismos de protección al consumidor en las cooperativas no agropecuarias, sobre todo en las que prestan servicios directos a los consumidores, con énfasis en la capacitación, la calidad y la comunicación en su proceso de gestión. En función de ello, se propone un conjunto de acciones cuya implementación en el caso de estudio puede tributar positivamente al diseño y aplicación de un sistema de protección al consumidor y, con ello, de la satisfacción de los consumidores actuales y potenciales.
Palabras clave: cooperativas no agropecuarias; derechos; protección al consumidor; servicios gastronómicos
As cooperativas não-agrícolas são uma organização econômica, social e inovadora no contexto cubano, criada a título experimental para satisfazer as necessidades da sociedade, reorganizar serviços e processos produtivos e aliviar o Estado da necessidade de realizar atividades econômicas não essenciais. Os consumidores durante o ato de consumo de bens e serviços, nestas formas associativas, estão desprotegidos na ausência de mecanismos de proteção do consumidor, o que conduz a uma violação dos seus direitos enquanto consumidores. O presente artigo visa avaliar o estado de proteção do consumidor nas cooperativas de comércio não agrícola na província de Pinar del Río, através do estudo de uma das cooperativas de serviços gastronômicos do município sede do referido território. Na pesquisa, foram utilizados métodos teóricos como análise-síntese e técnicas típicas de métodos empíricos, como a análise documental, entrevista e observação. Concluiu-se que é necessário desenvolver mecanismos de proteção ao consumidor em cooperativas não-agrícolas, especialmente aquelas que prestam serviços diretos aos consumidores, com ênfase na formação, qualidade e comunicação em seu processo de gestão. Com base nisso, é proposto um conjunto de ações cuja implementação no estudo de caso pode contribuir positivamente para a concepção e aplicação de um sistema de proteção ao consumidor e, assim, para a satisfação dos consumidores atuais e potenciais.
Palavras-chave: cooperativas não-agrícolas; direitos; proteção ao consumidor; serviços gastronômicos
To satisfy their needs, people go to commercial establishments to obtain quality products or services. Consumers thus become the most important link in the consumer chain and, in turn, the weakest link when, compared with service providers, they find themselves unprotected from their rights due to ineffective consumer protection mechanisms, which can have both psychological and economic consequences.
The organizations that produce these goods or provide services face many challenges generated by the global, national and local context, which obliges them to promote within their strategies an organizational culture as a form of innovative management, capable of committing their members to be more efficient in their activity towards consumers. This is the case of the non-agricultural and livestock cooperatives (CNA in Spanish), which emerged in the Cuban socioeconomic scenario as key entities in the satisfaction of society's needs and the redimensioning of productive management and services in the country, as well as in terms of decongesting the burden and weight of the State in the development of economic activities that are not fundamental to the achievement of their goals.
The partners during the process of providing services often incur violations of the legal rules established for the protection of consumer rights; hence, also, in this novel form of management, the human factor is required to undergo the metamorphosis desired by consumers.
The Cuban State has made an effort to change this reality, and has therefore taken steps to implement or improve consumer protection systems as part of the updating of the economic and social development model, the adoption of a new law and various channels of communication between consumers and the various State bodies so that they can channel their complaints, concerns and suggestions, and finally the elevation to constitutional status of a new right: the right to consume quality goods and services. Quality is assumed to be the "set of properties and characteristics of a service, product or process that satisfy the needs established by the user, citizen or client" (Santos, 2017, p. 198).
The creation of the CNAs, as part of the non-state sector of the economy, was foreseen in the Economic and Social Policy Guidelines, approved at the 6th Congress of the Cuban Communist Party. Recently, this process acquired a constitutional foundation on the basis of article 22, paragraph b, of the Constitution of the Republic of 2019 (Asamblea Nacional del Poder Popular, 2019). In the province of Pinar del Río, the CNAs began to be created in mid-2013 and, among them, only six were born within the service sector, from establishments that were subordinated to the Trade Business Group: three in the areas of textile manufacturing services, shoe repair and household appliances and three in restaurant and cafeteria services1. Most of the members of these establishments already belonged to them before their conversion to a cooperative; the rest joined after the new cooperatives were set up.
Taking into account that in cooperatives, their members obtain the status of members and in front of the consumers they become sellers of products and services, some important questions could arise such as: are the members aware of the importance of the consumers for their business; how is their behavior in front of a consumer? Are they aware of the existence of the Consumer Protection System implemented by the Ministry of Domestic Trade (Mincin)?
Many other questions could be asked, so the new form of non-state management still needs study and attention by the agencies involved. That is why this article aims to evaluate the state of consumer protection in the CNAs of commerce, in the province of Pinar del Río through the study of one of the cooperatives of gastronomic services of Pinar del Rio municipality. To do so, it starts with the analysis of the cooperative, consumer, consumer protection and consumer protection system categories, to establish the relevant links between these categories and, finally, to establish a set of actions that will positively contribute to the improvement of the consumer protection system in non-agricultural cooperatives, in the service sector.
MATERIALS AND METHODS
In order to fulfil the objective set, several methods were used, both on the theoretical and the empirical level, based on the dialectical-materialistic method as the guiding method of scientific knowledge. The procedure of analysis-synthesis allowed to establish the links between the definitions or theoretical constructs that constitute the core of the analyses carried out in order to establish the need to design and implement, in the new CNAs, mechanisms for the protection to the consumers, taking into account the entrepreneurial edge of such associative forms and the economic and social impact they should have in the updating of the socialist development model in the country.
From the empirical level, the measurement method was used, based on the application of the techniques of documentary analysis, interviews and observation. The review of the normative documents, which establish the creation and operation of the CNA, as well as the internal documents of the CNA studied as a case, namely its Regulations and Statutes, made it possible to ascertain the shortcomings that still exist from the point of view of the commercial vision in these new forms, which undoubtedly impacts on the little importance given to consumer protection, as a legacy of the previous stagnant and not very proactive organizational culture of the domestic retail trade establishments from which they were derived. The interviews were carried out with the president of the cooperative and workers in their role as partners, with the aim of finding out their perception of the functioning of the organization, the quality of the services they provide, the satisfaction of the customers and the importance they give to their protection as consumers.
As an empirical technique, non-participating observation was used, based on the application of a guide developed for this purpose, which made it possible to identify characteristics and conditions related to service, quality, hygiene, cooperative discipline, customer service, organization, commercial image, etc.
RESULTS AND DISCUSSION
Non-agricultural and livestock cooperativism in services and protection to consumer
Cooperatives in Cuba constitute an important economic entity to contribute to the development of the national economy. They are a form of self-management, constituting an enterprise, oriented towards the production of goods and services that are based on the collective management of the members to satisfy their own needs and those of external consumers. These are grouped into two forms: agricultural and livestock cooperatives and non-agricultural livestock cooperatives. The latter find their legal basis in Decree Law 366 of 2018 "On non-agricultural and livestock cooperatives" (Consejo de Estado de la República de Cuba, 2018) with its Regulations, contained in Decree 356 of 2018 (Consejo de Ministros de la República de Cuba, 2018).
In defining what is meant by a cooperative, Cruz and Piñeiro (2011) state that "it is a group or association of persons who have voluntarily joined together to satisfy common economic, social and/or cultural needs and aspirations through a jointly owned, democratically controlled, autonomous and open enterprise" (p. 34).
Rodriguez (2017) states that "(...) cooperatives are, first of all, entities made up of groups of people with a common objective, which will be fulfilled on the basis of their own efforts and mutual help, giving rise to an associative space, particularly conducive to fostering an ethic of their own" (p. 39).
In the above definitions, a common element can be seen in the fact that cooperatives are constituted by a group of people with the same objective. For the purposes of this study, the authors assume the definition offered by Rodríguez (2017).
According to the International Cooperative Alliance (ICA), the principles that govern Cooperativism are (ICA, 1995, cited in Odriozola and Palma, 2018, pp. 82-83):
1. Voluntary and open membership: cooperatives are voluntary organizations, open to all persons capable of using their services and willing to accept the responsibilities of membership, without social, political, religious, racial or gender discrimination. They may also decide to separate some of their members. Therefore, they must have established, in their internal regulations, a set of criteria for the membership and the separation of some of their members and, in turn, be analyzed by the General Assembly as the supreme body of cooperatives.
2. Democratic management by members: members of cooperatives participate actively in decision-making and in the implementation of policies concerning the management of the cooperative, because cooperatives are organizations managed democratically by their members. Similarly, members appointed to represent and manage cooperatives are accountable to the members.
3. Member economic participation: all members contribute capital equitably to the cooperative, not only directly, but indirectly through their labor force, productive capacities, abilities or dedication to the development of the cooperative. A part of this capital is owned by the cooperative, with the purpose of creating social funds for education, contingency, investment, among others, that satisfy the needs of its members. These funds may be established by law or by the cooperative in its internal regulations. In addition, individually, the members have an economic participation based on the advance (monetary income received by the members on a monthly basis) and the return (what each member receives at the end of the fiscal year, if the cooperative has a surplus after fulfilling its obligations).
4. Autonomy and independence: cooperatives are autonomous and independent organizations, managed by their members. They may enter into agreements with other organizations provided that the democratic control of their members and the autonomy of the cooperative is maintained.
5. Education, training and information: cooperatives contribute to the education and training of their members so that they can collaborate effectively in their development. It is necessary that the members be trained, mainly in the field of cooperativism, to contribute efficiently to the management of the cooperative from the decision-making point of view. They must also inform the public of the particularities and benefits of cooperativism, as well as its principles and values.
6. Cooperation among cooperatives: cooperation among cooperatives is essential because with their union the cooperative movement is strengthened through local, national, regional and international integration.
7. Interest in the community: cooperatives work to achieve the sustainable development of their communities through policies issued by their members.
These cooperative principles, according to Cruz and Piñeiro (2011), are "guidelines or orientations on how cooperatives should be organized and function, and therefore serve to evaluate the extent to which an organization approaches the ideal of a true cooperative" (pp. 48-49).
From these principles, it can be inferred that the members are responsible for their actions and their permanence in society depends on it. Their association is voluntary, therefore, they must work for the social good and not to cause harm to people in their role as consumers, which is why the quality of services must be an important strategic goal and why training must be constant and effective. These principles serve to identify the presence of an organization with a sui generis legal nature, different from state and private companies.
For its part, Cuban legislation, through Decree Law No. 366 of 2018, establishes eight principles which are listed below: voluntariness, cooperation and mutual aid, collective decision and equal rights of members, autonomy and economic sustainability, cooperative discipline, social responsibility, collaboration and cooperation among cooperatives and other entities, education and training.
According to Ponce, Perugorría and Salgado (2015, p. 85) "the principles must constitute a system, however, without adequate education and training in cooperativism, it is impossible to implement and further develop them". Even though this idea is shared, the authors consider it necessary to go deeper into two principles that are more closely related to the efficient development of cooperative management in consumer protection: cooperative discipline and social responsibility.
According to the legal norm in force, cooperative discipline is the respect and compliance of the members with whatever legislation is applicable to cooperatives, which they comply with in a disciplined manner; inasmuch as Section Five of the Legal Regime, in article 7.2 of the aforementioned norm, it is established that the general provisions of the legislation in force are also applicable to them, therefore the CNAs must comply with the constitutional mandate and the stipulations for the application of the consumer protection system by the Mincin as the governing body.
On social responsibility, the partners with their work must contribute to economic and social development, and also meet their needs and those of the community. In that sense, if from their own principles and in line with the Economic and Social Policy Guidelines, consumers are being protected and if both contribute to the development of the nation, then the CNAs, putting those mandates into practice, contribute to the satisfaction of consumer needs and with it to the protection of their rights with a quality service.
As it is visible in the above reflections, cooperatives have the mandate to contribute to the development of society, guaranteeing the consumption of goods and services necessary for the reproduction of people's material and spiritual life, from their role as consumers, in order to comply with the legal system in both directions. However, researchers Rivera and Rodriguez (2015) have proposed that there are limitations in the legal-institutional sphere that affect the full development of CNA, such as:
With regard to the last two aspects mentioned, the authors Díaz, Santana and Torga (2020) propose that:
(...) it deserves special attention, in the aspect of cooperative education, to consider that it is urgent, on national soil, above all in the environment of the CNA, to propitiate and to intend the formation with respect to the benefits or not of the cooperative, the characteristics of this new economic actor, the new relations that are given between the partners that are no longer workers of a state company, where the administration and its administered converge (p. 14).
With respect to the consumer in Cuba, Resolution No. 54, dated 4 May 2018, of the Minister of Mincin, which approved the "Guidelines for the organization and implementation of consumer protection in the internal trade system", states in its annex of terms and definitions that the consumer is the "natural or legal person who acquires, uses or enjoys, as a final recipient, goods and services of any nature, retailer or beneficiary" (Ministry of Domestic Trade, 2018, p. 287).
In correspondence with the construct "consumer protection" refers Hernández (2002) that it is:
A systemic process, aimed at defending the interests and rights of consumers in their trading relationships with suppliers of goods and services. This system comprises the regulatory and methodological basis and the institutional forms through which actions aimed at the knowledge of the system, duties and rights, and the channels established for their exercise, are deployed.
For Ojeda (2018), the protection to the consumer does not refer only to the protection of the particular individual in the market, but extends to satisfy all the needs that the particular individual has and, although most of these needs are satisfied across the market, others not, as for example, the defense to the environment.
In the international order, in order to unify the criteria related to this aspect and thus consolidate the fight for the protection and defense of consumers, the United Nations (UN) approved in 1985 the so-called "Guidelines for Consumer Protection" (ONU, 2001), which endorsed the fundamental rights of consumers, namely: the satisfaction of basic needs, safety, to be informed, to choose, to be heard, compensation, education and a healthy environment (Santos, 2017).
In the Cuban legal system, it can be seen that the above definitions coincide with respect to the institution under study. Resolution No. 54/2018 of the Mincin, in its annex 1, entitled "Terms and definitions", refers to consumer protection as: the set of principles, provisions and organizational, functional and other actions aimed at educating, guiding and protecting consumers in the recognition of their rights and duties so that they can be exercised against suppliers in the act of exchange, characterized by agile and effective procedures (Ministry of Domestic Trade, 2018, p. 287).
These concepts analyzed above, compose an important definition exposed by Cruz, Menoya and Bosmenier (2019) on the system of consumer protection:
It refers to the mechanisms of action created to protect the rights and interests of consumers in the retail trade. It provides for the identification of consumer protection principles, the rights and duties of consumers, the general and specific obligations of suppliers, the consumer protection structures at each level, their subordination and functions, the inspection and control function, the bodies established to present complaints and claims by consumers, etc. and is characterized by agile and effective procedures.
Once the necessary concepts for the understanding of the subject have been analyzed, the following will refer to the case study of a CNA in the gastronomic services sector in the city of Pinar del Río.
Case Study: Non-Agricultural and livestock Cooperative "Casa Colonial"
In order to verify the current state of consumer protection, the CNA "Casa Colonial" was chosen as a case study, because it is located in the historical center of the city and because the influx of consumers is high. This CNA is destined to the gastronomic activity and was created in 2013. It currently has nine employees, including a president, a vice-president (substitute), a secretary, a person responsible for control and supervision, who make up the board of directors, as well as two employees, a cook and a cleaning assistant.
In the study carried out to the CNA, it was found that the priorities are focused on sales, which affects a greater effectiveness in the performance, which positively impacts the remuneration of the partners, leaving in a secondary level the consumers, who constitute the reason of being of these entities.
In the review of documents, the existence of the consumer protection committee was noted, which, as stated in the act of incorporation, is composed of the President of the CNA, the secretary and a gastronomic dependent, whose functions are to ensure compliance with the rights and duties of consumers; to address, respond to and process complaints, claims and suggestions from consumers; to update the consumer protection area; to manage the after-sales service and returns in the event of nonconformities, among others. However, there is no record of violations of consumer rights and it is contradictory that the consumer protection area is not visible and, therefore, that clients are not informed of the means or mechanisms for their defense as consumers, for example, that telephones and places where consumers can go to make a complaint or suggestion about the service received are displayed.
The interview conducted with the President and members of the cooperative yielded the following results:
As positive aspects:
On the negative side:
In the observation made, it was possible to verify the following:
General summary of the study
From the information found, described above, it is possible to make a general summary of the study and establish a group of regularities grouped into positive and negative aspects.
1. Existence of legal regulation on the operation of CNA
2. Increased product and service offerings for consumers
3. Improvements in working conditions
4. Equal pay for equal work
1. Lack of cooperative culture of the partners, actors of the economy and society in general
2. Shortcomings in economic contracting
3. Despite their autonomy, there is a perceived dependence on the company on which they depended
4. Lack of systematization in the training of members, which undermines the quality of the services they provide
5. Consumer protection in non-agricultural and livestock cooperatives is not a function to be prioritized, but rather the sales and profits they produce
Taking into account the regularities detected during the study, a group of actions is proposed below and whose purpose is to contribute to the structuring and implementation of the consumer protection system in the CNAs of the service sector, in the province of Pinar del Río. This system is focused on three fundamental axes, imbricated with the principles of cooperativism that serve as their basis, namely: training (directly related to the principle of cooperative education and training), quality management (directly related to the principle of economic sustainability) and communication (directly related to the principle of cooperative social responsibility).
System of actions
Axis 1. Training
Specific objective: Develop a training programme for the members of the CNAs to ensure that they are updated on the main regulations and current trends in consumer protection in the world and in Cuba, thereby contributing to the design and implementation of the consumer protection system in the units.
1. Conduct a training needs assessment on partners.
2. Design the training program taking into account the results of the diagnosis, the theoretical foundations assumed and the training needs identified
3. Implementing the training programme
4. Evaluate the impact of the training developed
Axis 2. Quality Management
Specific objective: Achieving integration between quality management and consumer protection functions, taking into account the nature of the entity providing services and, therefore, relations with customers/consumers are based on direct contact.
1. Carrying out events of commercial techniques and good practice assets between the establishments
2. Implementing a day on the occasion of International Consumer Day
3. Promote research and innovation through the Science and Technology Forum movement and the National Association of Innovators and Rationalizers
4. To offer security and guarantee to the products and/or services offered
5. Ensure adequate, timely and accurate information
6. Fostering a culture of respect for the consumer
7. Establish the day of the technique once a week to ensure hygiene, cleanliness and organization
8. Restructure the consumer protection committee. This commission, in the authors' opinion, should be composed of the president, the secretary and the person in charge of control and supervision, who are members of the board of directors and important decision makers within the entity. This resolves the problem that a gastronomic employee, who is directly linked to the service to the client, is, in turn, judge and party in the face of the violation of a consumer's right
9. To instruct the person in charge of control and inspection on consumer protection regulations, so as to demand compliance with them, a power conferred by Decree 356/2018 (Regulations of the CNA), as well as to promote the use of friendly negotiation for the solution of conflicts, as established by Decree Law 366/2018
10. Establish internal standards to ensure product safety, based on the ISO standards defined for this purpose (Cuban Standard)
Axis 3. Communication
Specific objective: To help ensure that information and communication for the consumer are in line with the consumer's requirements and provide them with the necessary tools to obtain the benefits of the products and services for the satisfaction of their needs and desires.
1. Design a system of institutional communication to expand the cooperative culture in society
2. Designing a system for disseminating consumer rights through the production of banners, slogans and brochures that reflect consumer rights
3. Designing the consumer protection area
4. Strengthen the link between non-agricultural cooperatives and the university on the subject
These actions will be carried out mainly by the boards of directors of the NACs, with the relevant adjustments, according to the characteristics of the activity they carry out and, in addition, they could count on the methodological advice and the experiences accumulated in management matters by the companies from which they were derived, which today constitute their relationship body.
As conclusions of the study carried out, it can be considered that the NACs, in their current legal and practical conception, are still far from an effective implementation of consumer protection mechanisms. Meanwhile, due to their experimental nature, they are in the phase of creating their own cooperative identity and in the current context, the fundamental priority is to validate their relevance for the economic and social development to which the country aspires.
As a result of this still complex situation, it can also be seen that negative elements inherited from the old business organizational structures persist, such as: the lack of a cooperative culture and a culture of quality, the absence of a customer orientation and understanding as consumers, as well as deficiencies in cooperative education and training.
On these assumptions, it can be said that the structuring and implementation of a consumer protection system in the NACs represents a need to be covered, especially in those NACs that provide services with an economic and social impact directly to the consumer population. This system must be based on the continuous training of partners and contracted workers, on integration with quality management and on internal and external communication with their audiences, so that the system responds to the characteristics and particular conditions of this new form of non-state management. In this sense, it would be valid to analyze experiences in the implementation of consumer protection systems in other entities -both in the cooperative sector and in other sectors- in order to establish such specificities, but that task exceeds the purpose of this paper.
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1Constituted under the Agreement No. 7454 of the Council of Ministers, dated 14 August 2013, these were 1- Atelier "La Moda" (municipality San Luis), 2- Shoe Repair Workshop "La Estrella Roja" (municipality Pinar del Río), 3- Home Appliances Repair Workshop "Hermanos Cruz" (municipality Pinar del Río), 4- Restaurant-Cafeteria "El Clavel" (municipality Pinar del Río), 5- Restaurant "Cielo Azul" (municipality Pinar del Río) and 6- Restaurant-Cafeteria "Casa Colonial" (municipality Pinar del Río).
Conflict of interest:
Authors declare not to have any conflict of interest.
The authors have participated in the writing of the paper and the analysis of the documents.