Bachelor of Science in Business Administration COURSE: Good Governance and Social Responsibility

Module 9

Topic: The Firm and CONSUMERS

Objectives:

1. To develop awareness on the influence of corporations and businesses on the lives of the people.
2. To identify the forms of commercial frauds that are being employed in the corporate world.
3. To determine which commercial laws and regulations have to be identified as best for the firm and consumers.

ELICIT: Much of the rules and laws governing commercial transactions and undertakings are motivated by ethical norms and considerations. For
in as much as we wanted to base our dealings upon the basic virtues of trust and good-heartedness, history and experience would tell us a
different narrative- that is precisely because we cannot fully trust each other that these rules must be institutionalized.

ENGAGE: The basic precepts of morality, such as honesty, fairness, justice, empathy, and the like, form part of the fundamental tenets that
govern commercial laws and regulations. This is especially true if take into consideration the magnanimity of the influence that corporations and
businesses have in the lives of ordinary people. We depend our needs almost entirely from the products being manufactured by these
capitalists. It is because of the enormity of influence that corporations and businesses have over our lives, vis-à-vis the vulnerability of
consumers to manipulation and deceit from the former, that we have to intelligently identify the forms of commercial frauds that are being
employed in the corporate world, as well as the laws through whose provisions consumers can find solace and protection.

And Filipinos are not alien to these scenarios of deception in advertising. Advertisers exaggerate. Business amplify. And consumers, well
are gullible They know the exaggeration, the untruth embroidery, but are nevertheless easily tricked—as if naively allowing the capitalists to
mislead them.

But we ask: is this kind of advertising illegal? Does it not constitute fraud, hence is against the law and must be punished accordingly?
While most consumers would answer in the affirmative, not illegal systems are on the same page. For one, the Philippines expressly allow this
kind of advertising. Under article 1340 0f the Civil Code of the Philippines,” the usual exaggerations in trade, when the party had an opportunity
to know the facts, are not in themselves fraudulent”. On the note therefore, the conventional amplification in advertising is not unlawful,
provided that the consumer had Had the opportunity to know the facts surrounding the product – at least in the Philippines.
 However, while the Law allows this usual advertising exaggerations, other marketing schemes are frowned upon, both from legal and
moral standpoints.

EXPLORE: The lesson proper.

ADULTERATION

Have you ever bought a food with foul smell, or a beverage with a foreign object inside? If not, then you are lucky. The social media has
been the most convenient forum for voicing out their dismay and rage of people who have been victimized with adulterated products. In its
simplest sense, adulteration is the unethical of debasing a pure or genuine commodity by imitating or counterfeiting it, by adding something to
increase its bulk or volume, or by substituting an inferior product for a superior one for the purpose of profit or gain.

In the Philippines, the notion of adulteration has been expanded to include those which contain poisonous or deleterious substance that
may injure one’s health. R.A. 7394 or the consumer Act of the Philippines. Prohibits the manufacture, importation, exportation sale, offering for
sale, distribution or transfer of ay food, drug, device or cosmetic that is adulterated or mislabeled.

Article 23. Adulterated food. – A food shall be deemed to be adulterated:

A)

1. if it bears or contains any poisonous or deleterious substance which may render it injurious to health: but in case the substance is not added
substance, shall not be considered as adulterated under this clause if the quantity of such substance does not ordinarily render it injurious to
health.

2). If it bears or contains any added poisonous or deleterious substance other than one which is (i) a pesticide chemical in or on grow
agricultural commodity. (ii)a food additive, (a color additive, (iii) for which tolerances;

3). If it consists in whole or any part of any filthy putrid, or decomposed substance, or if it is otherwise unfit for food.

(4 if it has been prepared, packed or held under unsanitary conditions whereby it may become contaminated with firth or whereby, it may
have been rendered injurious to health.

(5 if it is in whole, or part the product of a disease animal or of an animal which has died other than by slaughter;

(6 If its container is composed, in whole or in part of any poisonous or deleterious substance which may render the contents injurious to
health; or

7) if it has passed its expiry date.

B) if any valuable constituent has been, in whole or in part, omitted or abstracted therefrom and the same has not been substituted by any
healthful equivalent of such constituent;

2) if any substance not a valuable constituent, has been added or substituted or in part therefore:

3) if damage or inferiority has been concealed in any manner; or

4) if any substance has been added thereto or packed therewith so as to increase its bulk or weight, reduce its quality or strength, or
make it appear better or greater value than it is.

C) if it is, or bears or contains a color additive which is unsafe under existing regulations: Provided, that the department shall promulgate
regulations providing for the listing of color additives which are harmless and suitable for use in food for which tolerance have been established;

D) If it is confectionary, and it bears or contains any alcohol or nonnutritive article or substance except harmless coloring, harmless flavoring,
harmless resinous glass not in excess of four-tenths 4/10) of one per centum (1%) natural gum and pectin:

EXPLAIN: Article 29. Adulterated Drugs and Devices. – A drug or devices shall be deemed to be adulterated.

a) If it contains in whole or in part of any filthy, putrid, or decomposed substance, which may affect its safety , efficacy, or good quality; or
(2) if it has been manufactured, prepared or held under unsanitary conditions whereby it may have been contaminated with dirt and
filth whereby it may have been rendered injurious to health; or ( 3) if its container is composed, or in whole, of any poisonous or
deleterious substances which may render the contents injurious to health; or if it bears or contains any color rather than a permissible
one as determined by the department, taking into consideration standard of safety, efficacy or good quality.

b) IF it purports to be or is represented as a drug, the name of which is recognized is an official compendium and its strength differs from,
or its safety, efficacy, quality or purity falls below the standard sets forth in such compendium except that whenever tests or methods of
assay as prescribed are , in the judgment of the department , insufficient for making of such determination, the department shall
promulgate regulations prescribing appropriate teste or method of safety efficacy, quality or purity shall be made. No drug defined in an
official compendium shall be deemed to be adulterated under this paragraph because it differs from the standards of efficacy, strength,
safety, efficacy, quality or purity from such, standard is plainly stated in its label and approved for registration as such.
 c) If it is not subject to the provisions of the paragraph (b) and its strength differs from or its efficacy, quality or purity falls below, that
which the purports or is represented to possess.

d) If a drug or device and any substance has been mixed or packed therewith, or any substance has been substituted wholly or in part
thereof, so as to reduce its safety, efficacy, quality strength or purity.

e) If the method used in, or the facilities or controls used for its manufacture or holding do not conform to or are not operated or
administered in conformity with current good manufacturing practice to assure that such drug meets the requirements of this drugs as
to safety, quality, and efficacy, and has the identity and strength, and meets the quality and purity characteristics which it purports or is
represented to possess.

ELABORATE: Article 35. Adulterated Cosmetics. A cosmetic shall be deemed to be adulterated:

(a) If it bears or contains any poisonous or deleterious substance which may render it injurious to users under the condition of use
prescribed in the labeling thereof, or under the condition of use as are customary or usual: Provided that this provision shall not apply to
color additive hair dye, the label of which bears the following legend conspicuously displayed thereon: “ Caution: this product contains
ingredients which may cause skin irritation on certain individuals and a preliminary teste according to accompanying directions should
first be made. This product must not be used for dyeing the eyelashes or eyebrows; to do so may cause blindness” and labeling of which
bears adequate directions for such preliminary testing. For purposes of this paragraph (e) the term “hair dye” shall not include eyelash
dyes or eyebrow dyes.
(b) If it consists in whole or in part of any filthy, putrid or decomposed substance,
(c) If it has been prepared, packed or held under unsanitary conditions whereby it may have been contaminated with filth, or whereby it
may have been rendered injurious to health.
(d) If its container is composed, in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to
health.
(e) If it is not a hair dye and it bears or contains color additive other than which is permissible.
(f) If any of its substances has been mixed (1) or packed therewith so as to reduce its quality or strength or (2) substituted wholly or in parts
therefore.

EVALUATE: Differentiate the following:

a. Adulteration
 b. Misbranding

c. Deceptive and false Advertising

EXTEND: Looking forward for THE FINAL EXAM DEC. 15-16, 2022.

REFERENCE. Atty. Alden Reuben B. Luna,Ph. L.Social Responsibility and Good Governance. Copyright, 2016, Atty. Alden REUBEN B. LUNA.
Published by UNLIMITED BOOKS LIBRARY SERVICES & PUBLISHING INC., Intramuros, Manila.

1. Deceptive and false Advertising