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VI. ECONOMIC, SOCIAL AND CULTURAL RIGHTS

6.2. RIGHT TO ENTREPRENEURIAL ACTIVITY. PROTECTION OF CONSUMERS’ RIGHTS

Since Article 42 of the Ukrainian Constitution proclaims everyone’s right to entrepreneurial activity; the state guarantees free choice of such activities, free use of profits, provides freedom of competition between businessmen, protects consumers’ rights against unfair competition and monopoly in any sphere of entrepreneurial activities, and exercises control over the quality and safety of products and all kinds of services.

In the process of market transformations in Ukraine, the role of entrepreneurial activity begins to grow. Under influence of entrepreneurial development the structure of the national economy has already changed. For example, the share of non-state enterprises in the economy exceeds 85% and by volume of production they account for almost 75%. Some industries virtually ceased to be state-owned. Thus, the share of private enterprises in the light industry accounts for 95.5%; in wood processing and paper making industry – 93.6%; in ferrous metallurgy – 91.5%; and in food-processing - 91,3%. The enterprises of these industries produced 86% up to 95 % of all products. Agriculture and motor transportation are almost completely private.

According to the Commissioner, the market economy has to ensure primarily the development and state support of small and medium businesses. It has been proved by the experience of many countries, where the small and medium businesses provide from 40% to 60% of GDP. For this reason small business is developing extensively in Ukraine. At January 1,1999 the number of small businesses was 151,400 employing a total of 1.032 million people. There are 927,000 self-employed entrepreneurs and 35,500 farms employing 67,000 persons. Small businesses are mainly concentrated in trade and restaurant services - 51%, in industries – 15%, in construction – 10%, in consumer services– 5%, and in other areas - 19%.

Development of small business is going in most of Ukraine’s regions. For example, in the Autonomous Republic of Crimea there are 7,850 small businesses, 52,000 private enterprises, and 15,000 farms. Here small businesses employ 100,000 persons or one-fifth of all the employable population of the Crimea. In 1999 the share of small businesses in industrial production of the autonomy accounted for 12%.

The Commissioner admits, that entrepreneurs are becoming now ever more confident as a driving force of market transformations and societal development. Therefore, an important factor for the development of market relations and stabilization of the economy is legislative backup of the citizens’ right to entrepreneurial activity as secured in such laws as On Entrepreneurship, On Enterprises in Ukraine, On Economic Partnerships, On Restriction of Monopoly and Prevention of Unfair Competition in Entrepreneurial Activity, On Protection Against Unfair Competition, and On Ownership.

But the growing role of entrepreneurs in the economic life of our society is breeding a lot of problems of protection of their rights. The citizens’ appeals to the Commissioner prove that, contrary to the proclaimed policy to promote small and medium business, bodies of state authority and local self-government are ever more extensively violating the right to entrepreneurial activity. Among the main reasons of the violations is the inadequate legal framework, a complicated system of the accounting and reporting, absence of a system of financing and loans to small business, and the tax burden.

The analysis of how the protection of the entrepreneurs’ rights is complied with shows that operative legislation protects them inadequately. The Commissioner is of the opinion that legislative support of entrepreneurs can be improved by drafting new laws, introducing respective amendments and modifications to operative legislation, and aligning Ukrainian legislation with the laws of the European Union and world standards. The law should clearly define the terms ”large,” “medium” and “small” businesses and "entity of small business”; the procedure for levying duties and taxes should be improved, along with the introduction of stimulating taxes for emerging small business entities; accounting should be simplified and reporting reduced to a reasonable proportion; the system of restrictions in entrepreneurial activity should be analyzed inasmuch as they concern the advisability of awarding the existing types of licenses; and legislation should stipulate greater responsibility of officials who register business entities and issue them licenses.

Entrepreneurs are justified in demanding that the regulations of the Cabinet of Ministers and other agencies governing entrepreneurial activity be brought into conformity with operative legislation. The Commissioner received an appeal from Mr.V. of Nikopol, Dnipropetrovsk oblast, who believes that the Cabinet of Ministers of Resolution On Approving the Rules of Retail Trade in Copies of Audiovisual Products and Phonograms of November 4, 1997 and the Presidential Edict On Adjusting Trade in Some Excisable Goods Related to the Use of Audiovisual Products and Copies of Phonograms of May 20, 1998 violate the citizens’ rights to engage in entrepreneurial activity, since they prohibit retail trade in audiovisual products and phonograms in kiosks, outdoor stalls, auto shops and in the markets (except for the specialized retail outlets). As a result, small and medium businesses are denied equal opportunities for trade as compared to shop owners. Besides, they violate Article 42 of the Ukrainian Constitution: “The state ensures the protection of competition in entrepreneurial activity. The abuse of a monopolistic position in the market, the unlawful restriction of competition, and unfair competition shall not be permitted.”

The Antimonopoly Committee, State Committee for Regulatory Policy and Entrepreneurship and the Supreme Court of Arbitration came to the common conclusion that the above-mentioned Cabinet of Ministers resolution clashed with Article 92 of the Constitution as to the definition of the legal principles and guarantees of entrepreneurship, with Article 22 of the Constitution emphasizing that the content and scope of existing rights and freedoms should not be diminished in the adoption of new laws or in the amendment of laws that are in force, as well as with the Law On Entrepreneurship that does not stipulate any restrictions in this kind of activity. This issue was also raised in an appeal addressed to the Commissioner by entrepreneurs from Ivano-Frankivsk.

Clearly defined regulations on the development of entrepreneurship, small businesses in particular, should serve as a guarantee for the exercise of the citizens’ right to engage in such activity and for improving market relations. An adequate legal framework has to put in place an effective mechanism of protecting the rights and freedoms of entrepreneurs and creating favorable conditions for their sustainable development.

However, the entrepreneurs’ rights are being violated already at the stage of their registration. Sociological surveys show that contrary to the law requiring registration within five working days this process lasts about one month in the majority of cities. For no valid reasons the authorities introduce unjustified bans or restrictions in entrepreneurial activity. For instance, the executive committee of the Khomutets village rada in Poltava oblast, contrary to the Law On Entrepreneurship, resolved on March 12, 1999 to deny Mr.Melnyk the right to open his own trade outlet, arguing that there were not enough such enterprises on the territory under the rada’s jurisdiction.

In many districts of Kyiv the authorities assumed an indifferent attitude in supporting small and medium businesses, specifically in trade and provision of services. As a rule, this business is pursued from little outdoor stalls and kiosks. The procedure for issuing permits depends completely on the will of the city district authorities; it comes at a dear price and occasionally takes months and even years to be materialized. Besides, there is no guarantee whatsoever that once all the requirements are met, a respective permit will be issued.

Thus, Fram Co., a small business, obtained all the necessary documents at the Minsk district administration of Kyiv to erect temporary stalls along Obolon Avenue. The design and coordination of the project at 20 agencies took three years and cost several tens of thousands of hryvnias. But when all the documents were submitted to the Minsk district administration, the latter refused to issue a construction permit. Moreover, district administration did not compensate the material losses of the enterprise and no government official was made liable.

The same happened to Svitanok Co. Upon the preliminary approval of the Starokievsky district administration, the company prepared all the documents, purchased the necessary equipment to set up temporary trade in Khreshchatyk Street, and in the end received a refusal based on a verbal order of the Kyiv state administration despite the fact that the entrepreneurs had all documents and permits. Similar cases occurred in the Dniprovsky and Shevchenkivsky districts of Kyiv.

Throughout 1999 the Commissioner received many appeals from retailers complaining about the obstacles they face in their trade, in particular on the Victory Square in Zhytomyr, in the market of Uzhgorod, on the Ai-Petri plateau (in the cities of Yalta and Bakhchisarai, Autonomous Republic of Crimea), etc.

And all this occurs at a time when unemployment continues to grow and can be easily dealt with by permitting people to engage in small trade and provide consumer services. As statistics show, only 40% of registered small businesses really operate to date. The majority of them does not have the opportunity to invest in the development of their own operation due to absence of with low-interest long-term loans and insufficiently developed banking services.

Speaking at the 8th Congress of Ukrainian Union of Industrialists and Entrepreneurs, President Leonid Kuchma dwelled on the painful issues of small business and the problems of its survival. He emphasized that small and medium businesses, which, say, in Germany generate 65% of budget revenues, continue to be like outcasts and hardly manage to make their ends meet.

The Commissioner believes that to deal with these negative developments it is necessary to set up a system of state support of small businesses, promote the creation of new jobs by them, support business and investment activity, develop competition in the market of goods and services, encourage a more vigorous operation of financial, credit and investment mechanisms, seek new ways of raising fund for free enterprise, improve the infrastructure to provide small businesses with information, education and counseling services, and develop the small business sector on the basis of the restructured enterprises.

The tax burden is an acute problem for the development of entrepreneurial activity. Its reduction would check tax evasion and make much easier the work of tax inspectors have to sit at enterprises day and night and - apart from tax collection – impose huge penalties into the bargain. Besides, there have been cases when bodies of state authority and local self-government transgress their authority and introduce additional duties. For example, the city authorities of Kremenchuk for several years collected from entrepreneurs two annual illegal duties – for the issuance of a warrant for a trade facility and a permit to trade at the very same facility, instead of a one-time duty as stipulated for siting a stall or kiosk. During the humiliating annual reregistration of their trading sites entrepreneurs have to pay duties at all inspection bodies. Back in 1997 the city’s entrepreneurs appealed to the arbitration court against the unlawful actions of the city rada. Although the arbitration court allowed the appeal, the authorities continue charging the dues to this day and none of the officials were brought to account. The Commissioner initiated an inquiry into this case of violation of the entrepreneurs’ rights and freedoms.

Similar violations took place in Kirovograd, Odessa, Chernivtsi, Donetsk and some other cities. The Commissioner received a collective appeal from employers of Yuzhnoukrainsk, Mykolaiv oblast, complaining against the city administration’s breach of operative legislation concerning the change in market fees. After an inspection conducted by the Commissioner, Mr.Istochnikov, the local prosecutor, informed that his office has filed a protest with the city administration and the decision on introducing new rates of market duty for natural persons and legal entities was abolished. Unfortunately, in their appeals entrepreneurs refer to a lot of cases when they are penalized for offenses that do not entail any losses to the state budget and are not adequate to the committed offences. Besides, there have been cases when officials or a control body penalized entrepreneurs even after they proved that what they did wrong was beyond their control and they were actually not guilty. The Commissioner believes that in such disputable matters the final decision should be made by court. Only a court is empowered to determine the extent of the offence and the punishment it deserves and bring to account the representatives of the inspection bodies who grossly violated the entrepreneurs’ rights and caused damage to their businesses.

One way of easing the pressure on entrepreneurs was the introduction of a fixed tax and simplified forms of engaging in business. This made it possible to avoid unjustified inspections and contributed to reducing offenses in entrepreneurship.

For all that, there have been cases when officials did not execute the Presidential Edict and regulations to this effect and flagrantly violated the entrepreneurs’ rights to work according to a simplified form. Some bodies of local self-government increased by several times the amount of the fixed tax for no valid reasons. On this point the entrepreneurs from Kamenka-Dniprovska, Zaporizhia oblast, appealed to the Commissioner for intervention. Entrepreneurs from Poltava also had difficulties in asserting their right to choose between usual taxation and transition to a fixed tax.

The Commissioner thinks that the adoption of the Tax Code of Ukraine will improve the situation in entrepreneurship for the better. For all the flaws of the draft Code now under consideration, the reduction of the tax pressure and a simplified mechanism of charging taxes will enable the entrepreneurs to exercise their rights more effectively than before.

Excessive interference in the activity of business entities by bodies of state authority is among the most typical violations of the citizens’ right to entrepreneurship. In their appeals to the Commissioner entrepreneurs inform that such state authorities as the tax police, fire inspection, sanitary and epidemic service frequently transgress the law.

Even the provisions of the Law On Fire Safety are used to subject entrepreneurs to pressure. Another example of bureaucratic arbitrariness is also when officials of different agencies demand that entrepreneurs contribute to all sorts of charity funds the officials are personally interested in. Some of these funds have the human rights protection status. But it real fact they pursue activities that have nothing in common with what their foundation documents claim. Such contributions not only reduce the workers’ pay, but also drive the entrepreneurs into the “shadow.” They also are instrument in increasing the number of people seeking subsidies from the state and aggregate the structural crisis in the country.

Therefore, the Commissioner has to state that the impunity of such actions stimulates a permanent and powerful opposition to entrepreneurship on the part of officials and brings to naught the regulatory policy pursued in the state. An example in point is how the Presidential Edict On Some Measures of Deregulating Entrepreneurship of July 23, 1998 is actually executed. The Edict provides for a system of measures to adjust inspections and their procedure. But contrary to the requirements of the Edict the State Tax Administration issued an order under which inspections can be conducted at any time without the knowledge of its managers and without a respective warrant. Such inspections are negatively impacting on both free enterprise as well as on the moral and psychological environment among the employers.

Currently, more than 100 inspection bodies have the right to penalize entrepreneurs.

According to the International Finance Corporation, the tax authorities are the most active inspectors. Throughout the year every company was examined an average of 2.8 times. In all, the 1,600,000 examinations were conducted, taking up 2 million working days and causing a loss more than UAH 230 million for small businesses. For example, Karpaty-lis, a private company engaging in forestry in Tiachiv raion, Transcarpathia oblast, was visited throughout 1998 five times by tax inspectors, several times by representatives of the employment center, as well as the directorate for economic crime control, the fire inspectorate, and the prosecutor’s office for nature protection. After confiscating the financial and business papers of the company, the inspectors actually shut down its operation.

During 1998 the private company Spivdruzhnost was visited 21 times by taxmen and representatives of the tax police, raion state administration and the prosecutor’s office. Dynamo experienced 15 inspections, while Agroservice Co.Ltd. (Zaporizhia oblast) was forced to cease operation because of unjustified inspections. The operation of the Merkuriy Co-operative in Ukrainka, Kyiv oblast, was paralyzed when its financial and business documents were confiscated by the tax administration in defiance of the raion prosecutor’s ruling on the unlawfulness of this action.

In the second quarter of 1999 the state tax administration of Dzerzhinsky, Donetsk oblast, planned to inspect the Dzerzhinsky Bakery for the period from February 1997 to January 1999, although the enterprise underwent an inspection on December 28,1998. Fairly often such visits are paid without prior notice or no notice at all. Such violations were made by the Kharkiv United Tax Authority at inspecting the companies “ Nordik”, ”Gramo”, “Kharkivinvest”, “Khat” and others.

“No-notice” cases from the tax and inspection offices were detected in Sevastopol city, the Tarutin and Luybashev raions, Odessa oblast. Similar facts were revealed in the Volyn, Sumy and Chernihiv oblasts. The inspectors’ neglect of the President’s Decree in connection to the obligatory entry in the registration book has acquired a mass character.

The Commissioner thinks that the afore–mentioned instances require reformation of the system, which would exclude any intrusion of the executive authority, local government organs and their officials into activities of the working people, remove legal hurdles in business activity matters, ensure the right to free enterprise, guaranteed by the Constitution. Practice has shown that the announcement of the unified state regulating policy in business undertaking as one of the main priority in the work of the government bodies, concerning the implementation of the economic reform is of little efficacy. However, the diminishing of the entrepreneur’s value as a person through offending his rights to his private property inviolability on the part of the state officials is the most dangerous thing. Unfortunately, the approach of law-guarding organs to consider any businessman a priori a criminal, against whom one can use any illegal actions, is not rooted out. For example, Mr.Khomyik, a divisional police inspector, jointly with the workers of the Housing Maintenance Office No.1 of the town of Volodymyr-Volynsky have broken the shop door lock of the private company “Pax” without the Procurator’s sanction and the Director’s knowledge and confiscated all book-keeper’s documents, paralyzing the work of the whole firm. Mr. Serebrainsky, the Deputy Chief of the Ingulets Regional Police Department of the Dnipropetrovsk oblast and Mr.Loboda, the Head of the Economic Crime Department have broken the door and searched the “Uyut” cafe without the Procurator’s sanction and decision for a check-up, causing considerable material losses and moral damage to the workers. The Commissioner cannot help expressing her concern about the fact that even in the cases clearly regulated by law, the workers of the control organs, the tax police in particular, reveal a legal nihilism, rejecting everything that in their opinion hurdles them. For example, the tax police, for no valid reasons, introduced changes to the order of registration of the newly formed artificial persons, one of them being the obligation of a personal visit to the tax police of all founders, irrespective of their number.

Failure to arrive of at least one of them results in refusal to register the company.

The Commissioner considers that rooting out of concrete legal and administrative obstacles in the right to entrepreneurial activity must be done immediately. In particular, measures must be taken to put the check-ups, performed by the state control organs, in good order, determine the responsibilities of the statesmen, who brutally violate the legal norms in these matters. In the Commissioner’s opinion, in cases when taken decisions worsen the terms of the entrepreneurial activity, the increase of personal responsibility of the local authority leaders, will promote the development of small and average companies.

Self-governing business organizations play an important role in protection of the employers’ rights and the development of private business undertakings. It is not for nothing that the authority of the public employers associations and their role in strengthening of the formation of social partnership is growing.

The Commissioner actively cooperates in regard to protection of free enterprise with the Ukrainian Union of Industrialists and Businessmen (A.Kinakh), the Union of Lease-holders and Businessmen of Ukraine (V.Khmilovsky), etc. However, to give more weight to public associations it is necessary to ensure the organization and economic conditions of entrepreneurship. For this purpose the effective ways of co-operation of the government organs and self-governing organizations of small and average businesses, based on the principles of social partnership and "feed-back” between the Authority and business people on all levels of the state government must be established. Guaranteed should be the free information access to the government and local self-managing organs by the self-governing business associations.

These bodies must be involved into the elaboration and discussion of the legislative projects and other legal norms on free enterprise. The Commissioner believes that the society needs a distinct coordination of business development on a par with

Business association representatives, of government organs to control the local administration bodies’ consideration of the topics of entrepreneurship and regulating policy, of a step-by-step transition from the state regulation of free enterprise to the regulation on the basis of social partnership.

In their appeals to the Commissioner the business people insist still further on their rights protection. They are sure that this will make it possible to perform such actions that will be independent of the current political juncture, bureaucratic structures, and chiefly, facilitate a permanent control of the rights protection alongside with their upholding.

That is why the Commissioner considers that the protection of the employers’ rights, first and foremost of small and average companies, one of the largest active parts of the population, is of great significance to the rights safeguard in Ukraine. That is why a new section was set up in the Department of social and economic issues of the Commissioner’s secretariat. It started to investigate the observance of the employers’ rights and also co-operate with the Ukrainian State Regulation and Free Enterprise Committee (headed by O.Kuzhel).

The Commissioner has the appeals from citizens, concerning the mass violations of the consumers’ rights. The person who buys, orders, makes use of or intends to purchase or order goods (services) has to be protected as the consumer. The Ukrainian Constitution

(Article 42) presupposes that the state protects the consumers’ rights, controls the quality and safety of products and all types of services, promotes the activity of the public consumers organizations. The state directly regulates the relations between the consumers of goods and their producers, the sellers under the conditions of different types of ownership, determines the consumers’ rights and sets the methods of the state protection of their rights. The Law On Protection of the Consumers’ Rights adopted on May 12, 1991, aims at the immediate solution of these problems. It stipulates that consumers have the right to the goods of proper quality, commercial and other types of services, safety of goods at the time of purchase, order or usage of the goods (services) to satisfy their every day needs. They must obtain necessary and truthful information about the goods they are buying. The consumers may appeal to court or other corresponding state organs to defend their rights, claim for the losses, incurred by the goods (services) of bad quality and also damages, caused by goods (services), dangerous for people’s life and health as is stipulated by the law.

Unfortunately the declared consumers’ rights do not always find their reflection in reality. For example, the insufficient control over the production area and sales of goods in several cases resulted in the irresponsibility for the goods sold.

Having purchased such a product at a market or a private company, the consumer is devoid of the guaranteed right to substitute it or get the full refund, as he is not given any sales document.

The Commissioner states that the protection of the constitutional consumers’ rights cannot be settled without improving the quality of the home production, raising its competitiveness. The creation of the legal, organization, material and technical conditions will ensure that the home production conforms to the international and European standards.

That is why we welcome the beginning of creation of the Ukrainian legal basis, which will provide a possibility to struggle with such negative phenomena that harm human’s life. In order to draw the Ukrainian legislation near to that of the European Union, the Cabinet of Ministries adopted back to 19 March 1997 the Decree “On measures of gradual introduction in Ukraine of European Union’s directives, sanitary, ecological, veterinary and phyto-sanitary standards and the international and European rules”.

The Commissioner supports measures, concerning the regulation of the accreditation procedure and taking into account international agreements and European standards, ratified by Ukraine. This process demands from the government bodies and officials to introduce it in such a way that the real consumers’ rights are effectively protected. In this connection one cannot name as fortunate the approach of the State Ukrainian Committee of Regulation Policy and Free Enterprise, dealing with abolishment of the fundamental state certification standards UKRSERPO, the requirements to the system quality certification centers and the order of their accreditation (the Committee’s decision N17-06/10 of 21.10.98) in particular. It is no accident that such a simplified way of introducing European standards did not find support in its time at the State Ukrainian Committee on standardization, metrology and certification, and, today, regrettably, has been abolished.

Of little efficiency is the state policy of stimulation companies to aim at a competitive production, unsatisfactory are the measures in the sphere of demonopolization and prevention of unfair competition in the food markets, raw materials for the light industry, oil products, etc. Currently more than 50% of stock is sold without conformity certificates. For example, in Ternopil oblast an examination showed that 11 companies of 13 were selling goods without available certificates (31 names of products out of 67 had no conformity certificates, 15 being foodstuffs).

In Luhansk oblast 9 companies were checked and 7 of them were selling goods without the conformity certificates, whereas in Lviv oblast they constituted 25 out of 33 respectively.

The Commissioner has to state that the country is being threatened with a large-scale phenomenon, infringing consumers’ rights and negatively influencing people’s health. Mass sales of low-quality food products and medicines, including imported ones, is one of the sources of such this menace. As a result of flooding the market with low-quality and cheap food products, coming from abroad, every year tens of thousands of citizens get heavily poisoned, there are mortal cases. Sales of not only forged cognac or wine but even mineral water have become extensive. In search of ways to survive, domestic manufacturers often turn to imported technologies, which provide for unusual raw materials (genetically modified organisms; animals fed on the newest hormone preparations); a considerable quantity of food additives; modern methods of the food products preservation (irradiation), etc. The export of low-quality products to Ukraine by overseas competitors is forcing the Ukrainian producers to use the same components, and this leads to the loss of a significant advantage – the confidence of the local consumers in Ukrainian food technologies, the safety of which has been proved by many years’ experience.

At the same time the attempts to minimize or abolish certification of imported products are being made at the state level. These actions are targeted at unilateral advantages of foreign manufacturers and ruin the uniform national certification system in Ukraine, contradicting in this way the international and European experience.

Additionally it frees importers from corresponding obligations concerning Ukrainian consumers.

However, the comprehensive use of the tariff and non-tariff protecting mechanisms stipulated by the laws On State Regulation of Import of Agricultural Products and On the Quality and Safety of Food Products and Edible Raw Stuffs make it possible in some cases to prevent import of low-quality food products. Here are several instances of the products failing with the certification and prevented from getting to the consumers: shrimps from Estonia, that contained arsenic 9.7 times higher than stipulated by standards; steel crockery with the burn resistant covering from Czech Republic, cobalt content of which exceeded the norms by 7.2 % and that of nickel by 3.5%; cognacs made from ethyl alcohol instead of the cognac one; food rock-salt from Iran, lead content of which exceeded the norms by 2 times and cadmium by 10 times; vodka from Italy, with fusel oil content, exceeding twice the norms; palm oil from Sweden, found defected due to the overdose of toxic elements (lead, arsenic, iron); toys from Poland, Bangladesh, and Taiwan with toxic ingredients exceeding standards several times.

Forged goods and products are constantly found in the commercial outlets in Ukraine, the lead taken by alcoholic beverages, as their falsification already may yield enormous profits. The overwhelming majority of them come from abroad. However, the acting control of the imported alcoholic production fails to find concern with everybody, therefore there are attempts to remove such control, though it fully conforms to the clauses of the Agreement on partnership and co-operation between Ukraine and the European Union and also the Agreements on technical barriers in trade of GAAT/WTO.

The appeals to the Commissioner prove that the struggle against sales of poor quality food products and medicaments is currently waged insufficiently. To satisfy the citizens’ rights to quality food products and household goods, it is vital to set a more strict responsibility for the very fact of importing to Ukraine and subsequent sales of foodstuffs, medicines, especially with the overdue validity terms or the ones that do not meet the stipulated norms of quality and safety for person’s health.

The Commissioner regards that it is necessary here to introduce ways that assume not only economic but also a criminal responsibility.

Bad quality services by state and municipal organizations remains a topical issue. An example of a brutal violation of consumers’ rights is found in the joint appeal to Commissioner of Mr.Gulak and other residents of the village of Bratske, Mykolaiv oblast, concerning re-computations for the supplied heat in the season of 1998-99. The applicants underline that money was paid properly but the buildings were not heated in wintertime owing to unsatisfactory work of the organizations-in-charge. The appeals to the regional state authorities brought no success, the applications were left unattended. The Commissioner had to investigate a case of the human right offence.

The appeal of the Commissioner to Mykolaiv oblast administration contained a request to study the mentioned facts and help the applicants. In his letter the Head of the oblast administration replied to the Commissioner that the service provider was to re-compute the consumers for the factual service provision after the heating season was over; the applicants were re-computed and agreed thereof; the Management of the Bratsk village Authority and the regional Administration were requested to study a substitution of the existing system of charging for heat supply to population and given recommendations to treat people’s appeals with due attention.

The Commissioner received appeals about service provision by the so-called folk healers. The applicants assert that the requirements of the Presidential Edict On Measures to Govern Activity in the Area of Folk and Non-Traditional Medicine are ignored in practice. There are no details today about the number of people in the country who had studied and introduced the folk’s experience of treatment to prove they are no charlatans and do not earn on other’s grief. During the last 5 years the Ministry of Health Care of Ukraine has issued more than 1,000 licenses to those who practice phytotherapy, needle reflexive therapy, manual therapy and massage. However, more than 14,000 unlicensed healers, the majority of whom do not have the fundamentals of the medical knowledge, continue to cure the patients.

Failure of the Executive Bodies of the city governments, the State tax Administrations and Offices of the Ministry of Internal Affairs to take them under control brings about cheating of citizens and considerable losses of revenue returns to the state budget.

That is why to regulate the activities of the folk healers and the control over their work is deemed urgent.

Taking into consideration all the above mentioned, the Commissioner has to state that lately the protection of human rights has weakened, which is brought about, among other aspects, by the liquidation of the State Committee on the consumers’ rights protection. Numerous facts testify that the principles of free entrepreneurial activity, fixed in article 42 of the Constitution, the creation of necessary conditions for full realization of citizens’ right to work, state protection of the consumers rights are not observed.

The Commissioner trusts that upholding the rights of business people and consumers is one of the burning issues of the State Administration bodies of all levels and bodies of local self-government, of the state officials and people–in-charge. The State has to create proper terms for realization of the constitutional rights to entrepreneurial activity and also improvement of the well being of the Ukrainians by way of involving wide circles of population into this activity. The Commissioner will make it a running practice to draw the attention to the right protection of entrepreneurs and consumers.

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