Argentina: Student Tourism
June 24th, 2009
Gonzalo Casanova Ferro asked:
Argentina: Student Tourism
Santiago Aramburu and
Gonzalo Casanova Ferro
For ever students
There are several theories that explain the origin of Tourism. Some of them spring from an anthropological fate, others speak about a psychic motivation and finally others try to impose a historical reading.
From this last trend other variants also spring; two great lines run through the theoretical frame of those who dare throw a hypothesis in this sense: there are those who identify the first tourists among the ancient pilgrims that sought to contemplate some of the world’s seven wonders, those who identify the medieval peoples that sought to visit sacred places and, finally, those who state that actually, presently, we should consider that the first tourists were students. Strictly speaking: “graduates”. They meant, thus, XVII century upper-middle-class London people who, once they finished their studies, they began an initiate trip round the most important capitals of Europe, an antecedent of the “Grand Tour” . It was not about a leisure or fun related activity, but about a means to complete their formation; it consisted of knowing the people and the markets their would later deal with professionally in a better way.
No matter how, here and throughout the world, Tourism, as we know it nowadays, emerged in the XX century.
At the beginning, tourist travels might have been a product of some wealthy man’s eccentricity. An elite’s privilege connected with the need for adventure, free time or a mere means to alleviate the upper classes boredom. But from the 30s on, it did not take long to get into a period which spread it as a working class right, right assisted by the so-called Well Being State y focused on the “sun and beach” products (season and rigid packages, aimed ill-informed people). And so it finally became the NTE (New Tourism Era) which combines and surpasses both stages (great market segmentation, specialized products, tourist protection systems, sustainability conscience, etc).
The paradox implies that in recovering Tourism antecedents, the ancient European habit will revive as a juridical and market category, in such southern a scenery, that we could even say that in more fair conditions, it would not be exempt from light and shade.
We propose ourselves, then, to analyze what is meant by Student Tourism in Argentina, who its actors are and what its role is, going through the most difficult cases and their possible solutions.
Unlike our country, in the rest of the world expressions as “student tourism” or “student travel” may represent:
A) Any student trip lead by teachers and with an educational character ;
B) Certain organizations services for a university segment (also including teachers) ready to travel anywhere, normally abroad and generally for study reasons ;
C) the one made by student groups, organized by specialized people, when they decide to visit historical places, museums, parks, monuments, important natural environments, beaches, mountains, prairies, etc. and which allows them to closely know places and activities which they have barely known through lecture explanations ;
D) the one organized by learned youngsters, who obtain information via internet, who are motivated for life in a globalized society and combine their travel experiences with adventure, study, work and rest. They travel to become part of a traveling international community ;
What is meant by “Student Tourism” in Argentina?
According to the hasty dictation of the 25.599 law, it shall be understood as such the one arising from art. 2º holding that:
“To the effects of the current law, student tourism shall be understood as:
a) Study travels: Formative activities integrated to the schools curricular proposal, which are organized and supervised by authorities and teachers from the respective institution;
b) Graduate travels: Tourist activities aimed at celebrating the finalization of an educational level or career, which are organized with the parents or student tutors participation, aimed at recreation and amusement, independent from the schools curricular proposal and without detriment of the fulfillment of the minimum days attendance according to the school calendar of each educative jurisdiction.”
Needless to say the previous definition has been subject to severe criticism. On the one hand, it seems excessive to include without any warning study travels, since a more strict interpretation of the norm would imply school trip should be mediated by a travel agent no matter its length or distance. One the other hand, when analyzing the second clause, it says that the formula “parents participation or pupils tutors” turns out too open, giving rise to confusions or ambiguities. Anyhow, it is not our intention to solve it here, but only to set forth that maybe this norm in particular requires certain reconsidering.
Anyway, the “Student Tourism” category is a legislative creation fit for Argentina, that in other countries can be mistaken either for “youth tourism”, destined to cover vacations for that segment, or for “interchange student tourism”, that is to say pupils of different nationalities who shift from one place to another to get the experience of a foreign langauge or different educational system. What we call “student tourism”, on the other hand,involves a very unusual phenomenon which, although it includes study as well as graduate travels, is very associated wiht the latter category, with winter season and focused on one destination: Bariloche.
For decades the destiny of “Student Tourism” has been San Carlos de Bariloche in Rio Negro province. Nowadays nobody doubts its position as regards to student travels; mainly for the second cycle (polimodal or secondary) of our educational system. This, without detriment of,in the future for market economy or currency reasons,losing its leadership if new destinations appear for this present segment.
The offers the same attractions as any other urban centre: good lodging, gastronimy options varieties, dancing places, etc; but combined with a privileged natural scenery. Founded in 1902 and with a design imporved by architect Alejandro Bustillo in the 30s, the city grew surrounded by the beauty of the Nahuel Huapi National Park, its mountain range geography covered with natural lakes and woods which make it the ideal place for skiing, climbing, trecking, and like activities.
At the beginings of the 60s the city abandoned its Bavarian alpine styleimprinted on it by the German architect Hacker, and its vertical development began7. The 70s and the 80s were in charge of placing this sports variety at the middle class reach aided by big carriers who saw there the chance for graduate travels. Its leadership reamins since then, in spite of intervals due to rising economy periods where we had to compete with international destinations (especially Brazil) or in crisis periods, like the present times, where second options such as Cordoba´s Villa Carlos Paz are considered. In spite of it, Bariloche is now overflowed during winter (june/july) which coincides with school vacations in most of the country.
Claimants and their roles
There exist five claimants who take part in the hire of “student travel” development services:
Schools
Students (and their legal representatives -parents or tutors-)
Service rendors/renderers
Agencies allowed to operate with “Student tourism”
National Tourism Secretary
Local Tourism authorities
Schools in general deal with the graduate travel issue as with a problem which requires a special treatment.
On one extreme and in order not to share responsibilities,promoters not only are not allowed enter the facilities, but also are parents and pupuils informed that service rendering is their own responsibility and risk; even more,teacher participation is discouraged and if travel coincides with working days (outside winter vacations period) absenteeism is registered.
Moderate positions try not to intervene in negotiation, but to supervise the the trajectory of the agency/ies who place offers. They suggest not only teacher participation but also parents or supervisors, as well as assistance to the students group who are travelling.
Finally, and as an exception, there are institutions who contradicting art.1 from 18.829 Travel Agents Law and art.18 from 118/05 Resolution, organize their own graduate travels, generally by underhand methods or by some intermediary teacher who “covers” forthe institutional infringement. 118/05 Reslution only contemplates an exception in its art.17 and it is that the offered travel must take only one day and it does not include to spend the night.
Since payment modalities of these sort of travels is made by installments throughout a year, students start probing into agencies to cantract during this period. In this sense, the experience of the same year´s graduates preceding them is usually important but not determinig. Some groups say yes and others reach a consensus with their parents. In Argentina the age of consent is 21 and only exceptionally some acts are allowed at 18. The average age at which pupils consider travelling is normally under this age, and therefore their parents or legal tutors will be the ones who will end up signing contracts with the agencies. Moreover, in hte case of some educational travels the age allowed is under 14.
Service rendors are the direct service suppliers, hotel managers, carriers,gastronomists, skii instructors, trainers, fotographers, etc. The agency keeps a commercial relationship with them, almost permanent which allows it to finance their costs in a better way ot of a volume and continuity offer. Where the “optional” calls (everything that is sold and to the student´s adress) makes up for an important part of the business. Needless to say that in many cases the economic situation (particularly currency types) can determining for rendors to neglect local market, creating distortions or weakness in the sector of the Argentine agencies who work in the student´s segment.
For the travel agency to be able to operate in the Argentinean territory it must obtain a temporary or definitive license which needs to meet certain requirements:
A) To possess functional structure, i.e. phisical facilities and at least one registered competent´s contract (a Tourism phB), who will be responsible for the Agency´s technical aspects.
B) To have the corresponding Precarious Permit and the Provisional License.
C) That he or the firm´s holders have no criminal or commercial records that prevent them from trading.
D) To establish a Guarantee Fund generally made up by a bond insurance depanding on the agency´s tipe and location.
E) And finally, that the holder be registered as a Trader if it comes to a sole trader, or the activity be described in the corporate purpose, if it comes to a partnership.
The Travel Agency who furthermore seeks to organize graduate travels must previously obtain a “National Authorization Certificate for Student Tourism Agencies”, which also means they must grant a life, a personal accidents, a civil accountability insurance, and another one for complete medical care, for each and every member of each contingent of students, that covers any risk from the beginning to the end of the travel. On the other hand, they must also annually submit an affidavit with the following information:
a) Firm´s personnel – main and branch offices- who will wait, in this environment,
on the student tourism area, with personal data and function specified;
b) Name, birth date, id number and adress of the persons who will take resposibility, coordinate and control compromise fulfillment in the travel destinations. They must also give the address of each place they will carry out their activities.
c) Offered programs. A brief sinthesis of the services they will render, giving name and address of the different service rendors:
Hotels, carriers and the ones in charge of the excursions, giving clear quantity of the palces contracted with each of them. Advertising brochures and material must be attached;
d) A list of the persons in charge of coordinating destinations and the group coordinator who must be over 21, giving name, id number and address, schooling, years of service in the company;
e) A list of the promoters of each company, name, they must be over 18, id number and address, schooling, years of service in the company;
f) Persons authorized to sign contracts.
g) The Agency holder must carry an authenticated copy of the contract model they will use for the services sale;
h) Insurance policies for civil liability, personal accidents and medical assistance;
i) Quantity of services programmed for the current year –sold or booked-, indicating anticipated date of departure of the contingents, educational institution they belong to, destination, hotel they will be lodged in, transports they will use and all the services included with their certificate of qualification delivered by the CNRT. They must clearly specify quality, type and category of the different services. Likewise, unless it is a question of the year activities begin, they must attach a report with statistical detail of the previous year´s activities.
8 Although Resolutions speak of categories in terms of organizers or traders, this is not strictly like that since categories must be interpreted together with the Decrete 2182/72 which regulates Law 18.829, which only takes into consideration three kinds of agencies: Tourism and Travel Company (TTC), Tourism Agency (TA) and Tickets Agency (TA).
9 Regulations do not take into acount certain limitations belonging to insurance legislation related to minors and trade operation conditions.
As previously mentioned, trade method is done ahead of time, fractionally and documented in deed, generally standardized whose model can be downloaded from Internet10.
In the terms of the National Tourism Law11 and the National Student Tourism Law12, the National Tourism Secretary is the Application Authority. It is responsible for establishing national policies of the activity in the frame of the Strategical Federal Plan for Sustainable Tourism. It is before this institution that travel agents require their license, it it the body which deals with files and acts as controller, able to impose sanctions for infringement and/or non-observance of the norms which govern the activity, to the extent of being able to immediately cancel certifications delivered to transgressors.
Local Tourism Authorities often have more power to behave as the comptroller of the touristic destination and in deed in some provinces they have the Ministry rank. That is why in many jurisdictions inspectors are htemselves the local authority and control not only agencies but also hotel, gastronomy, dancing premises and other rendors. In the proper case of the San Carlos de Bariloche Townhall three norms govern:
• 1396-CM-04 Byelaw which organizes terms and range of a “Student Tourism Services Certificate” it delivers to the borrower companies.
• 39-I-06 Byelaw which imposes an affidavit to suppliers and customers.
• 1026-I-06 Byelaw which calls for a record of entry in the AFIP.
So far everything seems to be considered and controlled; nevetheless, market situation can sometimes give unpleasant surprises: companies that close down for uncertain reasons and leave hundreds of tourists stranded or about to travel.
Strictly and comparatively speaking, agencies that collapse due to fraudulence or wrong administration are no so many. Out of three thousand eight hundred entered agencies, only two hundred fifty eight13 are qualified to trade “student tourism” 14, and out of these an average of two per year in the lat five years record sudden falls for the above mentioned reasons; nevertheless,the sense of impunity and affliction such situations provoke n society, together with the mass media multiplying effect, generate some sort of public indignation, completely understandable.
We shall describe, then, four cases (probably the most outstanding) where civil administration seems to have learnt how to solve the different crisis provoked by agencies who unexpectedly stopped operating . Thus, preventive measures on the
company, deference to current and to the about-to-leave-passengers, coordination with
direct rendors and local authorities, negotiations with other agencies, etc. are being
10 www.turismo.gov.ar
11 Ley 25.997
12Ley 25.599
13 Figures from in January 2006 provided by Secretaria de Turismo de la Nación (Argentina).
14 Bulletin Nº 196 from Cámara Argentina de Turismo (CAT) 12/10/2005 cites a report from Secretaría de Turismo de Río Negro stating that “the previous trade leaders, as Río de la Plata and El Rápido Argentino did not survive to the economy crisis and nowadays, the companies that bring most students (to Bariloche) are Travel Rock and Flecha Bus, which will take and render services to a 40% of the students”.
optimized not because regulations foresees them as a tool or a retaining wall fit for these sort of situations, but because Tourism phase and continuity as a state policy have thus allowed. What worries us then, is that these prodeedings have not had a normative correlation and therefore “the solution” has been more operative than institutional.
The Río de la Plata Inc. Case
Río de la Plata Inc. had two corporations: Transporte Río de la Plata Inc. And Río de la Plata Tourism Inc. both had a travel agency license; nevertheless, from 1997 on the first one was withdrawn and only the latter was operating. Río de la Plata Tourism Inc. not only had the prestige for long being in the market, but also it had an infrastructure that allowed it to cover for transport and hotel services with their own unities and lodging.
In August 2002 an incident presaged the fall of one of the most important operators in student tourism. A group of parents, pupils and teachers took possession of a Río de la Plata company building inBuenos Aires in response to the notice announcing they would not be able to travel the next day due to a bus breakage.
Twenty four hours later the problem was solved but doubts were already there.
In November 2002 and precisely in two of the Río hotels (Austonia Inn and Austonia III) the trade union workers went on strike, and this provoked a series of breaches for the student who were already at destination. Reports were immediately given at the San Carlos de Bariloche Townhall and the National Tourism Secretary (since hotels running is local competence and travel agencies´ is federal). Strikers even threatened to block access routes for Río buses.
The company´s decision of a sudden change in Management and the closing of several branch offices caused the initiaion of administrative proceedings in December of the same year; in January 2003 it was quite obvious the the company would not be able to face services, so the Tourism Secretary issued a precausionary measure15: operation stay without detriment to demand the agency to fulfil the set up duties, though restricting it to operating in the future. By then fraud suspicions were apparent to everyone and Criminal Courts also intervened16.
Mass media and the questioned company´s wealth made facts transcend to the national politics atmosphere, entering not only in the agenda of several legislators but also in the President´s (Dr. Eduardo Duhalde); since he was summoned by the Bariloche Townhall Council to manage17 the resolution of the conflict with the Río de la Plata workers who had the whole city in their power.
Passengers who had not travelled yet were assisted by other agencies which in some cases accepted part of previous payments; and in other cases had negotiate either for stay days or for service quantity or both.
15 Order 79/03.
16 National Criminal Court Nº 31 Secretary Nº 119.
17 Resolution Nº 004-PCM-2003.
In November 2003 hotel auctions were initiated directed by the Work Chamber of Rio Negro18, but it was not until September 19th 2005 that bankrupcy was petitioned19.
The LAPA Estudiantil Inc. Case – Air Generation
LAPA was a single company but made up of two different coporations, LAPA Inc. and LAPA Estudiantil Inc.
At the beginning of 2003 roumors about the financies of the airlines were quite alarming; labor protests were rapidly increasing. According to some board members reasons were to be found in the price of aerial fuel or, beeter said, in the taxes levied on it, taxes which left this and other airlines very far from the profitabiliy line (already hard in itself to reach for any aeronautical enterprise).
The public bodies answers for this situation were dissimilar. The Transport Secretary, shich was perhaps the suitable body for proposing some alternative remained quiet; while the Tourim Secretary on the contrary, chose to deferthe renewal of the allowance for operating in student tourism, ( a preventive method for these cases).
In May the papers dramatically announced “COMPANY CLOSED AND COMPANY DIRECTORS DISAPPEARED WITH NO EXPLANATIONS – LAPA could leave 1200 children without their graduate travel” 20. None of these were exactly like that, neither did the directors disappeared, nor were the graduates left without their travel, in fact in October that same year (paying a $85 difference and with arrangements done by the Tourism Secretary) the last contingent travelled21; nevertheless before getting these results, comings and goings oscilated between the tragical and the grotesque.
Parents protests before the Tourism Scretary seat, the Holders and Consumers Board of the legislature of Buenos Aires, negotiating and demanding a solution from the National Executive Power, offers by Aeroandina (main company´s shareholder) to reinvest and renew flights, if and only if, the government blocked fuel prices at (U$) $85 per lt., allowing them to rise the rate scale to a 20 %22, preventive stay of their license23 for a long sequence of irregularities committed by the company, journalists who hopelessly mistook bankrupcy proceedings for insolvency24, the uncertainty of those who paid a part and feared the syndic would claim the rest, and the opening of an eternal criminal record.
18 Aguilar Nair Marco and others with Transportes Automotores Río S.A. and another one without records.
19 National Trade Court Nº 25 Secretary 50.
20 Clarín Newspaper, 24/5/2003, Constanza Durán.
21 Clarín Newspaper 2/10/2003 Otra empresa se hizo cargo de 800 chicos
The graduates who were not taken by LAPA travel.
22 Tour Messenger Newspaper Feliz domingo para todos 9 June 2003
23 Order 487/03 from Secretaria de Turismo de la Nación
24 It was not until March 8th 2004 that the National Trade Court Nº 14 Secretary 28 dictated the company`s bankrupcy.
All this involved an enormous waste of efforts and dispositions and replies which turned out well due to a civic complaint and the good will of some officers.
The 5 Five Zones Case
The same as the previous one, Cinco Zonas SRL (Five Zones limited liability company) was a company specialized in the organization of travels for technical level graduates.
It operated normally, and had no excessive criminal records that would leading us to foresee what later happened. Moreover, the paradox is that the company´s managers had brought six reports against different agencies seeking to make them meet the current touristic normative.
It owned 7 branch offices around the country, which implies a more or less solid structure so as to yearly mobilize, and indeed they did, a great number of students. And according to their rendors, it did not owe big money amounts.
So, when least expected, there came the unexpected , in a weekend the main office located in Ciudad Autónoma de Bs. As. and its 7 branch offices alloted in the cities: Gran Bs. As., Córdoba, Mendoa and Salta had been completely emptied without warning.
In December 2005, Monday 19th every newspaper mentioned the disappearance of the Cinco Zonas managers, without a trace and having left their offices completely empty. For students, parents, rendors, authorities and the very employees surprise, who feared reprisal, the company´s managers disappeared leaving over 850 children stranded in San Carlos de Bariloche city and with no returning possibilities. This added to the next passengers about to travel; and some other 1200 approx. Who had already begun to pay the installments of the travel the would make in 2006.
The same day the news appeared, the National Tourism Secretary corroborated teh above mentioned situation by means of an inspection record, and declared the forfeiture of the company´s license for lacking operating structure (N 156/03 Resolution), trying to direct the situation.
What later happened was continuous and public parents and students complaints, especially in Córdoba province since most of the aggrieved students were from there.
In less than a week later, the students who were in Bariloche city and those who were about to travel were able to see their dream come true. Some tourism companies, the National Tourism Secretary and the Tourism Agency from Córdoba (province entity in charge of the tourism sector) combined, interceded for the fulfilment of the Cinco Zonas contracts after a negotiation with the rendors25.
25 Clarín Newspaper, Thursday 22nd, December 2005, Marta Platía.
So far, there was still one problem to solve; that of those who had started to pay in 2005 planning to travel the first half of 2006. Once more, some decided to close negotiations giving up price and/or services, and others prolongued conversations trying to improve their situation.
The cycle repeats itself. On one hand, the administrative complaints before the comptroller institution made by several damaged contingents, as well as by the verycompany´s emloyees.
On the other hand, the judicial issue related with criminal reports (still being processed) initiated in different parts of the country against the company´s holders in connection with the supposed swindle.
And, finally, the actual solution, i.e., different alternatives the injured party have and will have, according to context, time and will of those they negotiate with.
The Zaiga Travel case
Tours and Travel LLC, had been created as a family company oprating under the trade name of Zaiga Travel. They dealt with student tourism for many years, apparently with no problems at all, in fact in 2005 inspections ahd been made and the agency was in order and in agreement with the regulations in force. One day before the official announcement the company informed its hirers they would not give any more payments, since they were not able to meet pending compromises due to financial problems. The affliction extended over the 6000 involved who gradually became aware.
Most of them saught a response from the appropriate authority: The National Tourism Secretary and others appealed to the Government itself.
After meetings between the National Tourism Secretary and many local companies, it was announced tha Fleachabus Travel company and Tourism together with the collaboration of their service rendors would provide with new travel programmes especially designed to take care of the well known situation. Out of 256 damaged contingents, the majority accepted the new offer.
As for administrative proceedings, they were initiated the 15th of March 2006, and it was dictated by Disposition 453/06 from the National Tourism Secretary, the agency´s stay of operation and the opening of administrative records, for alleged infringement of Art. 8a of the Travel Agents Law (18.829) which would end up with the licence´s cancellation. The same day criminal records were opened at the Crime and Reformatory Bureau, and the Court 19° was chosen, case 13.888, with District Attorney N30.
Synthesis
From the above mentined experiences some criteria can be drawn:
A) From teh legal point of view: Labour cases will be upheld as long as, as happened with the Rio case, there exist property. If, on the contrary, an emptying takes place as with the Cinco Zonas case, it will be upheld, but there will be no payment. Trade cases will surely end up in bankrupcy, as well as the administrative case will end up fined and closed. Criminal cases, on the other hand, will be dalayed in time since it is generally very difficult to prove suitability for the criminal type.
B) From the damaged point of view: Whatever their situation is, they will be subject to affliction or uncertainty proper to those who endure malicious maneuvre. In fact, those who had not travelledend up hiring another company, giving up either part of the previous payment, comfort, days, excursions or a combination of the above mentioned.
C) From the market and political point of view: Delay between the damaging fact and the different solutions for each one of the claimants weakens the whole system. Then, crossed accusations between institutions, companies and holders are the ideal scenery for things to remain unchanged.
In search of a solution
“Truth is never bad…but unavoidable”, as the song goes. Put in other words Can everything be foreseen? Yes, it can; what we can not do is avoid it. That is to say, we can have the best road legislation, we can have a good signalling, good traffic lights and a good policeman at every corner, and that will not prevent someone from speeding infringing all these precautions. Can we prevent someone from emptying a company? someone from running away to avoid resposibility? someone from maladministrating a company leading it to bankrupcy? Definitely not, nut we can avoid its consequencies, without forgetting that obviously we are in front of a trading between private parties and that, further beyond shared setbacks we are still dealing with a luxury service. Thsi does not prevent us from understanding that as Dr Tale26 points out your graduate travel should not be considered just as any another travel, but as a unique episode and as such, when thwarted it deserves courts27 tutelage.
So far, it seems that when the student tourism agency breaches contract (whatever reasons), the logical thing to do would be to seek aid from the Warranty Fund; as the Art.13 from 18.829 Law comtemplates:
“Infringement to Article 6° from the law in force shall be sanctioned with oparation stay until the warranty fund´s normalization. The sanction will become license cancellation and closing of premises if the fund does not regularize in a six (6) month term. In that case, the fund´s balance shall be applied to indemnify for breach of contracts.” (the bold lettered sentence is ours)
26Tale Camilo, Travel Contract Vol II. Hammurabi Editorial– Buenos Aires 2005
27Civil and Trade Chamber. La Plata, Room II, 11/3/93, “Lucero, Carlos y otro c. Quilmas Tur S.A.”, JA, 1994-I-232.
But for this there are two obstacles difficult to solve without an act amendment; the first one is the amount and its estimation, the second one its set up manner. Criteria for determining the warranty amount are established by kind of agency and location, not by
operation volume, this gives smaller figures, hard to update and when it comes to indemnify for a serious infringement they would not even pay for the process. As for the manner, we have already mentioned the fund is normally composed by a bail insurance which determines, as Dr Benitez28 points out, that before the incapability of determining who shall travel, the Tourism Secretary becomes a beneficiary of it and therefore makes room for the interpretation that it can only be used for repaying fines, hindering the essence of the rule.
Beyond general complaints aimed at reducing presale terms, the parleyer debate in search of a definitive solution immediately appeared. Congress members took command and several projects drew the attention of the respective Tourism Boards:
a) The project impelled by the private sector29 and congressman
Heredia (PJ – FPV Córdoba) proposed to modify law 25.599, allowing the AAAVandT30 to be the one to categorize student travel agencies and administer an ad hoc Warranty Fund.
b) The UCR recovered a porject from the previous year already
introduced by congresswoman Beatriz Leyba de Martí
(Córdoba)31 and introduced another one by Silvana Giudici32
(Capital) where a “Fund of Contingency for Student Travels” is
created, integrated by a 3% Agencies would deposit over the
services and programs billed value.
c) The Tinnirello Carlos A. project and others by the Social
Meeting Net of Capital Federal33 proposed a savings bank system
Unattachable which would be opened by Banco Nación for every
contingent at the same time.
d) De Bernardi Eduardo, congressman for Chubut (PJ – FPV)34
proposed that contracts for student tourism be approved by
the Customer Protection Secretary, to which there
also should be submitted consuming realted issues aroused by
infringements.
e) The ARI on the other hand, with ariel Gorbacz as intermediary
proposed the setting-up of a Trustee35 established in a bank firm
chosen by the students themselves.
But, actually, no matter the solution proposed it would not be feasible unless the necessary faculties were delivered to the application authority (as much as for demanding warranties as for taxing beyond the current year).
28 Kemelmajer de Carlucci, Aida and Benítez, Diego. Tourism, Law and Regional Economics. Rubinzal – Culzoni Editors, Buenos Aires 2003.
29 File Nº 3007-D-2006 / Parlamentary Procedure 64
30 Asociación Argentina de Agencias de Viajes y Turismo
31 File Nº 6874-D-2005 / Parlamentary Procedure
32 File Nº339-D-2006 / Parlamentary Procedure 22
33 File Nº 2874-D-2006 / Parlamentary Procedure 61
34 File Nº 1484-D-2006 / Parlamentary Procedure 25
35 File Nº 0862-D-2006 / Parlamentary Procedure 16
The party in power clearly felt this need and acted in consequence. The legislative debate at the Lower House did not turn out so strenuous. Over 153 congressmen present 136 voted in favour of the majority´s opinion, only 13 for denial and 3 abstentions. At
the Upper Chamber the procedure was as speedy as the previous one.
The New Law
The modification project for Student Tourism Law 25.599 impelled by the Partido Justicialista36 sanctioned in December 20th 2006 by Law 26.208 is only made up by 9 articles which constitute the basics to access a defenitive solution.
The first article replaces clause g) from the Art. 5° Law 25.599 demanding that, in the affidavit given by those who ask for the corresponding certificate, they declare the number of services programmed, sold or booked without restricting the information to the current year as done before. Furthermore, it requires that it be specified data not included in theoriginal text: total cost and by contingent.
The second article replacing article 6° Law 25.599 imposes a 15 working day term on those agencies who shall notify modifications to their affidavits, subjecting that condition to the generic sanction of the art. 10° Law 18.829.
The third article supplies for clause d) from the art. 7° Law 25.599 and mandates a rather confusing issue. The original text said that student tourism service sale contracts should hold among other requirements the following: “Reliable certification of the insurance contract, for each of the contracting parties, civil liability, life, accident and complete medical care coverage, with data details of the contracting insurance companies.” The impossibility to impose life insurance on minors and the absence of a product for complete medical care coverage made it impossible to meet such demands. So the present text reads: “ reliable certification of contracts for each one of the tourists making up the student contingent of personal accident insurance which covers for death and total or partial, permanent or transient disability risk, for medical and farmaceutical asistance.” Explaining that regulations could require other portection instruments that in all cases they should cover for phisical risks from the biginning to the end of the travel.
The fourth article is the one cutting the Gordian knot by incorporating clause e) to the article 7°, it is worth saying, compelling the agency to add to their contract the accreditation of having established enough warranties which should correspond with the final amounts of the envolved services. Thus making a declarative enumeration of the kind of warranties the application authority could ask, which are: a) fiduciary funds, b) patrimonial, c) banking, d) financial, e) deposits, f) bail insurance.
36File Nº 53/06
Likewise, the 5° art. Brings another innovation, the sustitution of art. 10°, which although it supports the authority of the National Tourism Secretary, it goes in reversewith the established in Decrete 1013/02, previously remarked in clause b) of Article 10° and Articles 11° and 12° of the original text ( particularly, the first two granting competence to Customer Protection to solve consuming matters under the terms of Law 24.240 and complementary rules). Decrete based on the principle by which special rules prevail over general rules.
Finally, Art. 6° sustitutes for Art. 16° and transforms the obligation of cancelling the “National Authorization Certificate for Student Tourism Agencies” for those agencies breaking the Law´s prescriptions; certificate given by a faculty that regards how delicate the closing process of an agency can be, and the need for, even in a closing process, the fullfilment of the assumed compromises. It applies the maximum penalization envisaged in Art. 10° of Law 18.829 and empowers to aggraviate up to the quintuple recurrence cases, in agreement to what was envisaged in art. 15° of the cited regulation.
The rest of the articled is rule-related.
To sum up: Resolution 237/07
We still had the challenge to find a solution insuring student travels, without imposing standards which in turn produce the opposite effect. A solution which prevented minors from running the risk of the operation and this latter from returning to the company environment.
This soluiton was provided by Resolution 237/07 dictated by the National Tourism Secretary who finally regulated Student Tourism. This implied to restructure A) Requirements demanded from those agencies who wanted to operate with Student Tourism. B) Contract terms. Apart from C) To constitute a private Trust administered by Nation Trust37 D) To modify the Insurance arrangement E) To establish a new arrangement for Coordinators and F) To fix coming obligations
A) The main modifications introduced in the general conditions to provide a certificate for the agencies who wanted to operate with student tourism were:
• To remove term dates, being able to request for it whenever necessary.
• To require affidavits every year to update the information in the student tourism file.
• To submit a contract certificate of each contracted service of each rendor and in the traders case the compromise shall be submitted by the organizer.
• Every two months a currency certificate of the tradings must be submitted.
• Traders must submit a copy of adherance to the Trust.
• Traders must submit a copy of the organizer´s warrant so they can act on his/her behalf in the contracts they enter into.
• They should attach a model of the book of coupons they will use.
37 www.nacionfides.com.ar
• They should state if contracts will be entered into before 60 days since the beginning of the travel and if study travels will be done.
• Those who state entering into contracts with more anticipaction than the 60 days before the travel shall submit:
? Pre-purchase certificate with classification or bail insurance policy and/or
? A letter of intent registering their disposal to give a banker´s reference and/or
? A letter of intent delivered by a Reciprocal Guarantee Company entitled with the authorization of the BANCO CENTRAL DE LA NACION ARGENTINA,
registering their disposal to give this kind of reference
B) Contract terms imply that:
• Services included are: transport, lodging, gastronomy, day excursions –except for active and/or adventure tourism- and insurance.
• Within the 30 days after the contract signing consumers should send contract agreements to the contingent´s travel agent.
• The agent shall enter the contract´s data into the application system with a registration password given with the certificate.
• Consumers shall have access to the system to check their contract.
• The agreement shall be improved with the PAYMENT OF INSTALMENT ZERO.
• INSTALLMENT ZERO shall be the 6% of each contract, whose voucher will be given by the agent and each passenger will be able to pay for at Banco de la Nación Argentina and Rapipago branches.38
• The Special Installment for 2006 travels will only bring the 1,5% of the unsettled contract already signed.
C) As far as the Trustee concerned:
• It shall guarantee obligations for breach of contract
• Organizers shall underwrite the contract of the administration private trustee
• The percentage on the amount of each individual contract will be the 6% of it.
• The contribution whall be deposited in legal currency in the account under the name of FONDO DE TURISMO ESTUDIANTIL determined by the fiduciary.39
D) The insurance system was adjusted to the following parameters:
• CIVIL LIABILITY
Total: ONE HUNDRED THOUSAND PESOS ($100.000) minimum.
Range: the whole Argentina country (including foreign destinations in case of dealing with them).
Minimum risks: Civil liability. Fire, thunder, explosion, electric discharge, gas leak. Food supply. Civil liability in third parties vehicle transportation.
38 www.cuotacero.com.ar
39 www.turismoestudiantil.gov.ar
• PERSONAL ACCIDENTS + ADDITIONAL COVERAGE
Total: FIFTY THOUSAND PESOS ($50.000) minimum.
Additional Coverage: FIVE THOUSAND PESOS ($5.000) Medical and Pharmaceutical Aid policy.
Range: life and permanent or temporary, total or partial disability coverage for each tourist consumer.
• TRAVELERS´ASSISTANCE
Total: FIVE THOUSAND PESOS ($5.000).
Range: emergency, accrediting register and authorization before the Health Services Superintendency.
E) The group´s coordinators shall meet the following contitions:
• Older than 21 years old with intermediate level or complete secondary studies.
• Criminal record and second offence certificate delivered by the NATIONAL MINISTRY OF JUSTICE AND HUMAN RIGHTS
• Good conduct certificate delivered by the coordinator´s domicile police.
F) Finally, travel obligations shall be:
• To have a coordinator every 35 consumers or fraction.
?A complete list of the contingent delivered by the APPLICATION SYSTEM OF STUDENT TOURISM
• Copy of the underwritten contract with each contingent
• Personal accidents coverage certificate, medical and pharmaceutical assistance and travel assistance record
• Medical records filled in by each tourist´s family doctor
As we can see, the STUDENT TOURISM FUND´s mission is to refund the consumers´ representatives the difference between the payments to the travel agents and services rendered by another trustee, to which the rendor would have aknowledged the payments done by the damaged travel agent. But for this to be possible, it was necessary to set reasons clear:
1. Travel´s cancellation for causes not related with consumers, wihthout force majeure or emergency
2. Travel agent´s manifestation of breach of duties
3. Travel agent´s default on payment of duties assumed with service rendors or the cancellation of the booking of the services hired
4. Facts or omissions provoking uncertainty of the travel or presumption of breach
5. Should any of the previous items happen, and the SECTUR for onerous and urgency reasons thus determines in virtue of the powers granted by art. 37 of Law N° 25.997 and other regulations in force.
REGULATORY EVOLUTION OF STUDENT TOURISM
Rule Date Issue
Res. 135 04/24/1987 Student Tourism information to the Application Authority
Res. 159
Repealed by Res. 187 and ratified by Res. 118 04/12/89 Requirements extension
Law 25.599 05/23/2002 National Student Tourism Law
Decree 1013 06/13/2002 Observaciones a la ley nacional de Turismo Estudiantil
Res. 175
Repealed by Res. 187 and ratified by Res. 118 01/29/2003 Devicing of the Certificate and instruction set
Act 35
Modernization and Competitivity Management – Repealed by Res. 187 and ratified by Res. 118 02/24/2003 Devicing of the model of Certificate
Res. 187 Repealed by 118 03/09/04 New requirements for the Certificate
Res. 118
02/08/2005 Certificate delivery system
Res. 987 08/24/2005 Amendment to Res. 118 Updated fees for the submision of application forms.
Res. 274 03/22/2006 Amendment to Res. 118 States that requested certificates shall be delivered from March 2nd of each year or following working day.
Res. 451 05/12/2006 Amendment to Res. 118 Demands the submision of Affidavits for sesrvices bound for the next year and difered application forms for 180 days.
Law 26.208 12/20/2006 Amendment to Law 25.599
Res. 237 03/15/2007 Passes new Student Tourism Regulation
Argentina: Student Tourism
Santiago Aramburu and
Gonzalo Casanova Ferro
For ever students
There are several theories that explain the origin of Tourism. Some of them spring from an anthropological fate, others speak about a psychic motivation and finally others try to impose a historical reading.
From this last trend other variants also spring; two great lines run through the theoretical frame of those who dare throw a hypothesis in this sense: there are those who identify the first tourists among the ancient pilgrims that sought to contemplate some of the world’s seven wonders, those who identify the medieval peoples that sought to visit sacred places and, finally, those who state that actually, presently, we should consider that the first tourists were students. Strictly speaking: “graduates”. They meant, thus, XVII century upper-middle-class London people who, once they finished their studies, they began an initiate trip round the most important capitals of Europe, an antecedent of the “Grand Tour” . It was not about a leisure or fun related activity, but about a means to complete their formation; it consisted of knowing the people and the markets their would later deal with professionally in a better way.
No matter how, here and throughout the world, Tourism, as we know it nowadays, emerged in the XX century.
At the beginning, tourist travels might have been a product of some wealthy man’s eccentricity. An elite’s privilege connected with the need for adventure, free time or a mere means to alleviate the upper classes boredom. But from the 30s on, it did not take long to get into a period which spread it as a working class right, right assisted by the so-called Well Being State y focused on the “sun and beach” products (season and rigid packages, aimed ill-informed people). And so it finally became the NTE (New Tourism Era) which combines and surpasses both stages (great market segmentation, specialized products, tourist protection systems, sustainability conscience, etc).
The paradox implies that in recovering Tourism antecedents, the ancient European habit will revive as a juridical and market category, in such southern a scenery, that we could even say that in more fair conditions, it would not be exempt from light and shade.
We propose ourselves, then, to analyze what is meant by Student Tourism in Argentina, who its actors are and what its role is, going through the most difficult cases and their possible solutions.
Unlike our country, in the rest of the world expressions as “student tourism” or “student travel” may represent:
A) Any student trip lead by teachers and with an educational character ;
B) Certain organizations services for a university segment (also including teachers) ready to travel anywhere, normally abroad and generally for study reasons ;
C) the one made by student groups, organized by specialized people, when they decide to visit historical places, museums, parks, monuments, important natural environments, beaches, mountains, prairies, etc. and which allows them to closely know places and activities which they have barely known through lecture explanations ;
D) the one organized by learned youngsters, who obtain information via internet, who are motivated for life in a globalized society and combine their travel experiences with adventure, study, work and rest. They travel to become part of a traveling international community ;
What is meant by “Student Tourism” in Argentina?
According to the hasty dictation of the 25.599 law, it shall be understood as such the one arising from art. 2º holding that:
“To the effects of the current law, student tourism shall be understood as:
a) Study travels: Formative activities integrated to the schools curricular proposal, which are organized and supervised by authorities and teachers from the respective institution;
b) Graduate travels: Tourist activities aimed at celebrating the finalization of an educational level or career, which are organized with the parents or student tutors participation, aimed at recreation and amusement, independent from the schools curricular proposal and without detriment of the fulfillment of the minimum days attendance according to the school calendar of each educative jurisdiction.”
Needless to say the previous definition has been subject to severe criticism. On the one hand, it seems excessive to include without any warning study travels, since a more strict interpretation of the norm would imply school trip should be mediated by a travel agent no matter its length or distance. One the other hand, when analyzing the second clause, it says that the formula “parents participation or pupils tutors” turns out too open, giving rise to confusions or ambiguities. Anyhow, it is not our intention to solve it here, but only to set forth that maybe this norm in particular requires certain reconsidering.
Anyway, the “Student Tourism” category is a legislative creation fit for Argentina, that in other countries can be mistaken either for “youth tourism”, destined to cover vacations for that segment, or for “interchange student tourism”, that is to say pupils of different nationalities who shift from one place to another to get the experience of a foreign langauge or different educational system. What we call “student tourism”, on the other hand,involves a very unusual phenomenon which, although it includes study as well as graduate travels, is very associated wiht the latter category, with winter season and focused on one destination: Bariloche.
For decades the destiny of “Student Tourism” has been San Carlos de Bariloche in Rio Negro province. Nowadays nobody doubts its position as regards to student travels; mainly for the second cycle (polimodal or secondary) of our educational system. This, without detriment of,in the future for market economy or currency reasons,losing its leadership if new destinations appear for this present segment.
The offers the same attractions as any other urban centre: good lodging, gastronimy options varieties, dancing places, etc; but combined with a privileged natural scenery. Founded in 1902 and with a design imporved by architect Alejandro Bustillo in the 30s, the city grew surrounded by the beauty of the Nahuel Huapi National Park, its mountain range geography covered with natural lakes and woods which make it the ideal place for skiing, climbing, trecking, and like activities.
At the beginings of the 60s the city abandoned its Bavarian alpine styleimprinted on it by the German architect Hacker, and its vertical development began7. The 70s and the 80s were in charge of placing this sports variety at the middle class reach aided by big carriers who saw there the chance for graduate travels. Its leadership reamins since then, in spite of intervals due to rising economy periods where we had to compete with international destinations (especially Brazil) or in crisis periods, like the present times, where second options such as Cordoba´s Villa Carlos Paz are considered. In spite of it, Bariloche is now overflowed during winter (june/july) which coincides with school vacations in most of the country.
Claimants and their roles
There exist five claimants who take part in the hire of “student travel” development services:
Schools
Students (and their legal representatives -parents or tutors-)
Service rendors/renderers
Agencies allowed to operate with “Student tourism”
National Tourism Secretary
Local Tourism authorities
Schools in general deal with the graduate travel issue as with a problem which requires a special treatment.
On one extreme and in order not to share responsibilities,promoters not only are not allowed enter the facilities, but also are parents and pupuils informed that service rendering is their own responsibility and risk; even more,teacher participation is discouraged and if travel coincides with working days (outside winter vacations period) absenteeism is registered.
Moderate positions try not to intervene in negotiation, but to supervise the the trajectory of the agency/ies who place offers. They suggest not only teacher participation but also parents or supervisors, as well as assistance to the students group who are travelling.
Finally, and as an exception, there are institutions who contradicting art.1 from 18.829 Travel Agents Law and art.18 from 118/05 Resolution, organize their own graduate travels, generally by underhand methods or by some intermediary teacher who “covers” forthe institutional infringement. 118/05 Reslution only contemplates an exception in its art.17 and it is that the offered travel must take only one day and it does not include to spend the night.
Since payment modalities of these sort of travels is made by installments throughout a year, students start probing into agencies to cantract during this period. In this sense, the experience of the same year´s graduates preceding them is usually important but not determinig. Some groups say yes and others reach a consensus with their parents. In Argentina the age of consent is 21 and only exceptionally some acts are allowed at 18. The average age at which pupils consider travelling is normally under this age, and therefore their parents or legal tutors will be the ones who will end up signing contracts with the agencies. Moreover, in hte case of some educational travels the age allowed is under 14.
Service rendors are the direct service suppliers, hotel managers, carriers,gastronomists, skii instructors, trainers, fotographers, etc. The agency keeps a commercial relationship with them, almost permanent which allows it to finance their costs in a better way ot of a volume and continuity offer. Where the “optional” calls (everything that is sold and to the student´s adress) makes up for an important part of the business. Needless to say that in many cases the economic situation (particularly currency types) can determining for rendors to neglect local market, creating distortions or weakness in the sector of the Argentine agencies who work in the student´s segment.
For the travel agency to be able to operate in the Argentinean territory it must obtain a temporary or definitive license which needs to meet certain requirements:
A) To possess functional structure, i.e. phisical facilities and at least one registered competent´s contract (a Tourism phB), who will be responsible for the Agency´s technical aspects.
B) To have the corresponding Precarious Permit and the Provisional License.
C) That he or the firm´s holders have no criminal or commercial records that prevent them from trading.
D) To establish a Guarantee Fund generally made up by a bond insurance depanding on the agency´s tipe and location.
E) And finally, that the holder be registered as a Trader if it comes to a sole trader, or the activity be described in the corporate purpose, if it comes to a partnership.
The Travel Agency who furthermore seeks to organize graduate travels must previously obtain a “National Authorization Certificate for Student Tourism Agencies”, which also means they must grant a life, a personal accidents, a civil accountability insurance, and another one for complete medical care, for each and every member of each contingent of students, that covers any risk from the beginning to the end of the travel. On the other hand, they must also annually submit an affidavit with the following information:
a) Firm´s personnel – main and branch offices- who will wait, in this environment,
on the student tourism area, with personal data and function specified;
b) Name, birth date, id number and adress of the persons who will take resposibility, coordinate and control compromise fulfillment in the travel destinations. They must also give the address of each place they will carry out their activities.
c) Offered programs. A brief sinthesis of the services they will render, giving name and address of the different service rendors:
Hotels, carriers and the ones in charge of the excursions, giving clear quantity of the palces contracted with each of them. Advertising brochures and material must be attached;
d) A list of the persons in charge of coordinating destinations and the group coordinator who must be over 21, giving name, id number and address, schooling, years of service in the company;
e) A list of the promoters of each company, name, they must be over 18, id number and address, schooling, years of service in the company;
f) Persons authorized to sign contracts.
g) The Agency holder must carry an authenticated copy of the contract model they will use for the services sale;
h) Insurance policies for civil liability, personal accidents and medical assistance;
i) Quantity of services programmed for the current year –sold or booked-, indicating anticipated date of departure of the contingents, educational institution they belong to, destination, hotel they will be lodged in, transports they will use and all the services included with their certificate of qualification delivered by the CNRT. They must clearly specify quality, type and category of the different services. Likewise, unless it is a question of the year activities begin, they must attach a report with statistical detail of the previous year´s activities.
8 Although Resolutions speak of categories in terms of organizers or traders, this is not strictly like that since categories must be interpreted together with the Decrete 2182/72 which regulates Law 18.829, which only takes into consideration three kinds of agencies: Tourism and Travel Company (TTC), Tourism Agency (TA) and Tickets Agency (TA).
9 Regulations do not take into acount certain limitations belonging to insurance legislation related to minors and trade operation conditions.
As previously mentioned, trade method is done ahead of time, fractionally and documented in deed, generally standardized whose model can be downloaded from Internet10.
In the terms of the National Tourism Law11 and the National Student Tourism Law12, the National Tourism Secretary is the Application Authority. It is responsible for establishing national policies of the activity in the frame of the Strategical Federal Plan for Sustainable Tourism. It is before this institution that travel agents require their license, it it the body which deals with files and acts as controller, able to impose sanctions for infringement and/or non-observance of the norms which govern the activity, to the extent of being able to immediately cancel certifications delivered to transgressors.
Local Tourism Authorities often have more power to behave as the comptroller of the touristic destination and in deed in some provinces they have the Ministry rank. That is why in many jurisdictions inspectors are htemselves the local authority and control not only agencies but also hotel, gastronomy, dancing premises and other rendors. In the proper case of the San Carlos de Bariloche Townhall three norms govern:
• 1396-CM-04 Byelaw which organizes terms and range of a “Student Tourism Services Certificate” it delivers to the borrower companies.
• 39-I-06 Byelaw which imposes an affidavit to suppliers and customers.
• 1026-I-06 Byelaw which calls for a record of entry in the AFIP.
So far everything seems to be considered and controlled; nevetheless, market situation can sometimes give unpleasant surprises: companies that close down for uncertain reasons and leave hundreds of tourists stranded or about to travel.
Strictly and comparatively speaking, agencies that collapse due to fraudulence or wrong administration are no so many. Out of three thousand eight hundred entered agencies, only two hundred fifty eight13 are qualified to trade “student tourism” 14, and out of these an average of two per year in the lat five years record sudden falls for the above mentioned reasons; nevertheless,the sense of impunity and affliction such situations provoke n society, together with the mass media multiplying effect, generate some sort of public indignation, completely understandable.
We shall describe, then, four cases (probably the most outstanding) where civil administration seems to have learnt how to solve the different crisis provoked by agencies who unexpectedly stopped operating . Thus, preventive measures on the
company, deference to current and to the about-to-leave-passengers, coordination with
direct rendors and local authorities, negotiations with other agencies, etc. are being
10 www.turismo.gov.ar
11 Ley 25.997
12Ley 25.599
13 Figures from in January 2006 provided by Secretaria de Turismo de la Nación (Argentina).
14 Bulletin Nº 196 from Cámara Argentina de Turismo (CAT) 12/10/2005 cites a report from Secretaría de Turismo de Río Negro stating that “the previous trade leaders, as Río de la Plata and El Rápido Argentino did not survive to the economy crisis and nowadays, the companies that bring most students (to Bariloche) are Travel Rock and Flecha Bus, which will take and render services to a 40% of the students”.
optimized not because regulations foresees them as a tool or a retaining wall fit for these sort of situations, but because Tourism phase and continuity as a state policy have thus allowed. What worries us then, is that these prodeedings have not had a normative correlation and therefore “the solution” has been more operative than institutional.
The Río de la Plata Inc. Case
Río de la Plata Inc. had two corporations: Transporte Río de la Plata Inc. And Río de la Plata Tourism Inc. both had a travel agency license; nevertheless, from 1997 on the first one was withdrawn and only the latter was operating. Río de la Plata Tourism Inc. not only had the prestige for long being in the market, but also it had an infrastructure that allowed it to cover for transport and hotel services with their own unities and lodging.
In August 2002 an incident presaged the fall of one of the most important operators in student tourism. A group of parents, pupils and teachers took possession of a Río de la Plata company building inBuenos Aires in response to the notice announcing they would not be able to travel the next day due to a bus breakage.
Twenty four hours later the problem was solved but doubts were already there.
In November 2002 and precisely in two of the Río hotels (Austonia Inn and Austonia III) the trade union workers went on strike, and this provoked a series of breaches for the student who were already at destination. Reports were immediately given at the San Carlos de Bariloche Townhall and the National Tourism Secretary (since hotels running is local competence and travel agencies´ is federal). Strikers even threatened to block access routes for Río buses.
The company´s decision of a sudden change in Management and the closing of several branch offices caused the initiaion of administrative proceedings in December of the same year; in January 2003 it was quite obvious the the company would not be able to face services, so the Tourism Secretary issued a precausionary measure15: operation stay without detriment to demand the agency to fulfil the set up duties, though restricting it to operating in the future. By then fraud suspicions were apparent to everyone and Criminal Courts also intervened16.
Mass media and the questioned company´s wealth made facts transcend to the national politics atmosphere, entering not only in the agenda of several legislators but also in the President´s (Dr. Eduardo Duhalde); since he was summoned by the Bariloche Townhall Council to manage17 the resolution of the conflict with the Río de la Plata workers who had the whole city in their power.
Passengers who had not travelled yet were assisted by other agencies which in some cases accepted part of previous payments; and in other cases had negotiate either for stay days or for service quantity or both.
15 Order 79/03.
16 National Criminal Court Nº 31 Secretary Nº 119.
17 Resolution Nº 004-PCM-2003.
In November 2003 hotel auctions were initiated directed by the Work Chamber of Rio Negro18, but it was not until September 19th 2005 that bankrupcy was petitioned19.
The LAPA Estudiantil Inc. Case – Air Generation
LAPA was a single company but made up of two different coporations, LAPA Inc. and LAPA Estudiantil Inc.
At the beginning of 2003 roumors about the financies of the airlines were quite alarming; labor protests were rapidly increasing. According to some board members reasons were to be found in the price of aerial fuel or, beeter said, in the taxes levied on it, taxes which left this and other airlines very far from the profitabiliy line (already hard in itself to reach for any aeronautical enterprise).
The public bodies answers for this situation were dissimilar. The Transport Secretary, shich was perhaps the suitable body for proposing some alternative remained quiet; while the Tourim Secretary on the contrary, chose to deferthe renewal of the allowance for operating in student tourism, ( a preventive method for these cases).
In May the papers dramatically announced “COMPANY CLOSED AND COMPANY DIRECTORS DISAPPEARED WITH NO EXPLANATIONS – LAPA could leave 1200 children without their graduate travel” 20. None of these were exactly like that, neither did the directors disappeared, nor were the graduates left without their travel, in fact in October that same year (paying a $85 difference and with arrangements done by the Tourism Secretary) the last contingent travelled21; nevertheless before getting these results, comings and goings oscilated between the tragical and the grotesque.
Parents protests before the Tourism Scretary seat, the Holders and Consumers Board of the legislature of Buenos Aires, negotiating and demanding a solution from the National Executive Power, offers by Aeroandina (main company´s shareholder) to reinvest and renew flights, if and only if, the government blocked fuel prices at (U$) $85 per lt., allowing them to rise the rate scale to a 20 %22, preventive stay of their license23 for a long sequence of irregularities committed by the company, journalists who hopelessly mistook bankrupcy proceedings for insolvency24, the uncertainty of those who paid a part and feared the syndic would claim the rest, and the opening of an eternal criminal record.
18 Aguilar Nair Marco and others with Transportes Automotores Río S.A. and another one without records.
19 National Trade Court Nº 25 Secretary 50.
20 Clarín Newspaper, 24/5/2003, Constanza Durán.
21 Clarín Newspaper 2/10/2003 Otra empresa se hizo cargo de 800 chicos
The graduates who were not taken by LAPA travel.
22 Tour Messenger Newspaper Feliz domingo para todos 9 June 2003
23 Order 487/03 from Secretaria de Turismo de la Nación
24 It was not until March 8th 2004 that the National Trade Court Nº 14 Secretary 28 dictated the company`s bankrupcy.
All this involved an enormous waste of efforts and dispositions and replies which turned out well due to a civic complaint and the good will of some officers.
The 5 Five Zones Case
The same as the previous one, Cinco Zonas SRL (Five Zones limited liability company) was a company specialized in the organization of travels for technical level graduates.
It operated normally, and had no excessive criminal records that would leading us to foresee what later happened. Moreover, the paradox is that the company´s managers had brought six reports against different agencies seeking to make them meet the current touristic normative.
It owned 7 branch offices around the country, which implies a more or less solid structure so as to yearly mobilize, and indeed they did, a great number of students. And according to their rendors, it did not owe big money amounts.
So, when least expected, there came the unexpected , in a weekend the main office located in Ciudad Autónoma de Bs. As. and its 7 branch offices alloted in the cities: Gran Bs. As., Córdoba, Mendoa and Salta had been completely emptied without warning.
In December 2005, Monday 19th every newspaper mentioned the disappearance of the Cinco Zonas managers, without a trace and having left their offices completely empty. For students, parents, rendors, authorities and the very employees surprise, who feared reprisal, the company´s managers disappeared leaving over 850 children stranded in San Carlos de Bariloche city and with no returning possibilities. This added to the next passengers about to travel; and some other 1200 approx. Who had already begun to pay the installments of the travel the would make in 2006.
The same day the news appeared, the National Tourism Secretary corroborated teh above mentioned situation by means of an inspection record, and declared the forfeiture of the company´s license for lacking operating structure (N 156/03 Resolution), trying to direct the situation.
What later happened was continuous and public parents and students complaints, especially in Córdoba province since most of the aggrieved students were from there.
In less than a week later, the students who were in Bariloche city and those who were about to travel were able to see their dream come true. Some tourism companies, the National Tourism Secretary and the Tourism Agency from Córdoba (province entity in charge of the tourism sector) combined, interceded for the fulfilment of the Cinco Zonas contracts after a negotiation with the rendors25.
25 Clarín Newspaper, Thursday 22nd, December 2005, Marta Platía.
So far, there was still one problem to solve; that of those who had started to pay in 2005 planning to travel the first half of 2006. Once more, some decided to close negotiations giving up price and/or services, and others prolongued conversations trying to improve their situation.
The cycle repeats itself. On one hand, the administrative complaints before the comptroller institution made by several damaged contingents, as well as by the verycompany´s emloyees.
On the other hand, the judicial issue related with criminal reports (still being processed) initiated in different parts of the country against the company´s holders in connection with the supposed swindle.
And, finally, the actual solution, i.e., different alternatives the injured party have and will have, according to context, time and will of those they negotiate with.
The Zaiga Travel case
Tours and Travel LLC, had been created as a family company oprating under the trade name of Zaiga Travel. They dealt with student tourism for many years, apparently with no problems at all, in fact in 2005 inspections ahd been made and the agency was in order and in agreement with the regulations in force. One day before the official announcement the company informed its hirers they would not give any more payments, since they were not able to meet pending compromises due to financial problems. The affliction extended over the 6000 involved who gradually became aware.
Most of them saught a response from the appropriate authority: The National Tourism Secretary and others appealed to the Government itself.
After meetings between the National Tourism Secretary and many local companies, it was announced tha Fleachabus Travel company and Tourism together with the collaboration of their service rendors would provide with new travel programmes especially designed to take care of the well known situation. Out of 256 damaged contingents, the majority accepted the new offer.
As for administrative proceedings, they were initiated the 15th of March 2006, and it was dictated by Disposition 453/06 from the National Tourism Secretary, the agency´s stay of operation and the opening of administrative records, for alleged infringement of Art. 8a of the Travel Agents Law (18.829) which would end up with the licence´s cancellation. The same day criminal records were opened at the Crime and Reformatory Bureau, and the Court 19° was chosen, case 13.888, with District Attorney N30.
Synthesis
From the above mentined experiences some criteria can be drawn:
A) From teh legal point of view: Labour cases will be upheld as long as, as happened with the Rio case, there exist property. If, on the contrary, an emptying takes place as with the Cinco Zonas case, it will be upheld, but there will be no payment. Trade cases will surely end up in bankrupcy, as well as the administrative case will end up fined and closed. Criminal cases, on the other hand, will be dalayed in time since it is generally very difficult to prove suitability for the criminal type.
B) From the damaged point of view: Whatever their situation is, they will be subject to affliction or uncertainty proper to those who endure malicious maneuvre. In fact, those who had not travelledend up hiring another company, giving up either part of the previous payment, comfort, days, excursions or a combination of the above mentioned.
C) From the market and political point of view: Delay between the damaging fact and the different solutions for each one of the claimants weakens the whole system. Then, crossed accusations between institutions, companies and holders are the ideal scenery for things to remain unchanged.
In search of a solution
“Truth is never bad…but unavoidable”, as the song goes. Put in other words Can everything be foreseen? Yes, it can; what we can not do is avoid it. That is to say, we can have the best road legislation, we can have a good signalling, good traffic lights and a good policeman at every corner, and that will not prevent someone from speeding infringing all these precautions. Can we prevent someone from emptying a company? someone from running away to avoid resposibility? someone from maladministrating a company leading it to bankrupcy? Definitely not, nut we can avoid its consequencies, without forgetting that obviously we are in front of a trading between private parties and that, further beyond shared setbacks we are still dealing with a luxury service. Thsi does not prevent us from understanding that as Dr Tale26 points out your graduate travel should not be considered just as any another travel, but as a unique episode and as such, when thwarted it deserves courts27 tutelage.
So far, it seems that when the student tourism agency breaches contract (whatever reasons), the logical thing to do would be to seek aid from the Warranty Fund; as the Art.13 from 18.829 Law comtemplates:
“Infringement to Article 6° from the law in force shall be sanctioned with oparation stay until the warranty fund´s normalization. The sanction will become license cancellation and closing of premises if the fund does not regularize in a six (6) month term. In that case, the fund´s balance shall be applied to indemnify for breach of contracts.” (the bold lettered sentence is ours)
26Tale Camilo, Travel Contract Vol II. Hammurabi Editorial– Buenos Aires 2005
27Civil and Trade Chamber. La Plata, Room II, 11/3/93, “Lucero, Carlos y otro c. Quilmas Tur S.A.”, JA, 1994-I-232.
But for this there are two obstacles difficult to solve without an act amendment; the first one is the amount and its estimation, the second one its set up manner. Criteria for determining the warranty amount are established by kind of agency and location, not by
operation volume, this gives smaller figures, hard to update and when it comes to indemnify for a serious infringement they would not even pay for the process. As for the manner, we have already mentioned the fund is normally composed by a bail insurance which determines, as Dr Benitez28 points out, that before the incapability of determining who shall travel, the Tourism Secretary becomes a beneficiary of it and therefore makes room for the interpretation that it can only be used for repaying fines, hindering the essence of the rule.
Beyond general complaints aimed at reducing presale terms, the parleyer debate in search of a definitive solution immediately appeared. Congress members took command and several projects drew the attention of the respective Tourism Boards:
a) The project impelled by the private sector29 and congressman
Heredia (PJ – FPV Córdoba) proposed to modify law 25.599, allowing the AAAVandT30 to be the one to categorize student travel agencies and administer an ad hoc Warranty Fund.
b) The UCR recovered a porject from the previous year already
introduced by congresswoman Beatriz Leyba de Martí
(Córdoba)31 and introduced another one by Silvana Giudici32
(Capital) where a “Fund of Contingency for Student Travels” is
created, integrated by a 3% Agencies would deposit over the
services and programs billed value.
c) The Tinnirello Carlos A. project and others by the Social
Meeting Net of Capital Federal33 proposed a savings bank system
Unattachable which would be opened by Banco Nación for every
contingent at the same time.
d) De Bernardi Eduardo, congressman for Chubut (PJ – FPV)34
proposed that contracts for student tourism be approved by
the Customer Protection Secretary, to which there
also should be submitted consuming realted issues aroused by
infringements.
e) The ARI on the other hand, with ariel Gorbacz as intermediary
proposed the setting-up of a Trustee35 established in a bank firm
chosen by the students themselves.
But, actually, no matter the solution proposed it would not be feasible unless the necessary faculties were delivered to the application authority (as much as for demanding warranties as for taxing beyond the current year).
28 Kemelmajer de Carlucci, Aida and Benítez, Diego. Tourism, Law and Regional Economics. Rubinzal – Culzoni Editors, Buenos Aires 2003.
29 File Nº 3007-D-2006 / Parlamentary Procedure 64
30 Asociación Argentina de Agencias de Viajes y Turismo
31 File Nº 6874-D-2005 / Parlamentary Procedure
32 File Nº339-D-2006 / Parlamentary Procedure 22
33 File Nº 2874-D-2006 / Parlamentary Procedure 61
34 File Nº 1484-D-2006 / Parlamentary Procedure 25
35 File Nº 0862-D-2006 / Parlamentary Procedure 16
The party in power clearly felt this need and acted in consequence. The legislative debate at the Lower House did not turn out so strenuous. Over 153 congressmen present 136 voted in favour of the majority´s opinion, only 13 for denial and 3 abstentions. At
the Upper Chamber the procedure was as speedy as the previous one.
The New Law
The modification project for Student Tourism Law 25.599 impelled by the Partido Justicialista36 sanctioned in December 20th 2006 by Law 26.208 is only made up by 9 articles which constitute the basics to access a defenitive solution.
The first article replaces clause g) from the Art. 5° Law 25.599 demanding that, in the affidavit given by those who ask for the corresponding certificate, they declare the number of services programmed, sold or booked without restricting the information to the current year as done before. Furthermore, it requires that it be specified data not included in theoriginal text: total cost and by contingent.
The second article replacing article 6° Law 25.599 imposes a 15 working day term on those agencies who shall notify modifications to their affidavits, subjecting that condition to the generic sanction of the art. 10° Law 18.829.
The third article supplies for clause d) from the art. 7° Law 25.599 and mandates a rather confusing issue. The original text said that student tourism service sale contracts should hold among other requirements the following: “Reliable certification of the insurance contract, for each of the contracting parties, civil liability, life, accident and complete medical care coverage, with data details of the contracting insurance companies.” The impossibility to impose life insurance on minors and the absence of a product for complete medical care coverage made it impossible to meet such demands. So the present text reads: “ reliable certification of contracts for each one of the tourists making up the student contingent of personal accident insurance which covers for death and total or partial, permanent or transient disability risk, for medical and farmaceutical asistance.” Explaining that regulations could require other portection instruments that in all cases they should cover for phisical risks from the biginning to the end of the travel.
The fourth article is the one cutting the Gordian knot by incorporating clause e) to the article 7°, it is worth saying, compelling the agency to add to their contract the accreditation of having established enough warranties which should correspond with the final amounts of the envolved services. Thus making a declarative enumeration of the kind of warranties the application authority could ask, which are: a) fiduciary funds, b) patrimonial, c) banking, d) financial, e) deposits, f) bail insurance.
36File Nº 53/06
Likewise, the 5° art. Brings another innovation, the sustitution of art. 10°, which although it supports the authority of the National Tourism Secretary, it goes in reversewith the established in Decrete 1013/02, previously remarked in clause b) of Article 10° and Articles 11° and 12° of the original text ( particularly, the first two granting competence to Customer Protection to solve consuming matters under the terms of Law 24.240 and complementary rules). Decrete based on the principle by which special rules prevail over general rules.
Finally, Art. 6° sustitutes for Art. 16° and transforms the obligation of cancelling the “National Authorization Certificate for Student Tourism Agencies” for those agencies breaking the Law´s prescriptions; certificate given by a faculty that regards how delicate the closing process of an agency can be, and the need for, even in a closing process, the fullfilment of the assumed compromises. It applies the maximum penalization envisaged in Art. 10° of Law 18.829 and empowers to aggraviate up to the quintuple recurrence cases, in agreement to what was envisaged in art. 15° of the cited regulation.
The rest of the articled is rule-related.
To sum up: Resolution 237/07
We still had the challenge to find a solution insuring student travels, without imposing standards which in turn produce the opposite effect. A solution which prevented minors from running the risk of the operation and this latter from returning to the company environment.
This soluiton was provided by Resolution 237/07 dictated by the National Tourism Secretary who finally regulated Student Tourism. This implied to restructure A) Requirements demanded from those agencies who wanted to operate with Student Tourism. B) Contract terms. Apart from C) To constitute a private Trust administered by Nation Trust37 D) To modify the Insurance arrangement E) To establish a new arrangement for Coordinators and F) To fix coming obligations
A) The main modifications introduced in the general conditions to provide a certificate for the agencies who wanted to operate with student tourism were:
• To remove term dates, being able to request for it whenever necessary.
• To require affidavits every year to update the information in the student tourism file.
• To submit a contract certificate of each contracted service of each rendor and in the traders case the compromise shall be submitted by the organizer.
• Every two months a currency certificate of the tradings must be submitted.
• Traders must submit a copy of adherance to the Trust.
• Traders must submit a copy of the organizer´s warrant so they can act on his/her behalf in the contracts they enter into.
• They should attach a model of the book of coupons they will use.
37 www.nacionfides.com.ar
• They should state if contracts will be entered into before 60 days since the beginning of the travel and if study travels will be done.
• Those who state entering into contracts with more anticipaction than the 60 days before the travel shall submit:
? Pre-purchase certificate with classification or bail insurance policy and/or
? A letter of intent registering their disposal to give a banker´s reference and/or
? A letter of intent delivered by a Reciprocal Guarantee Company entitled with the authorization of the BANCO CENTRAL DE LA NACION ARGENTINA,
registering their disposal to give this kind of reference
B) Contract terms imply that:
• Services included are: transport, lodging, gastronomy, day excursions –except for active and/or adventure tourism- and insurance.
• Within the 30 days after the contract signing consumers should send contract agreements to the contingent´s travel agent.
• The agent shall enter the contract´s data into the application system with a registration password given with the certificate.
• Consumers shall have access to the system to check their contract.
• The agreement shall be improved with the PAYMENT OF INSTALMENT ZERO.
• INSTALLMENT ZERO shall be the 6% of each contract, whose voucher will be given by the agent and each passenger will be able to pay for at Banco de la Nación Argentina and Rapipago branches.38
• The Special Installment for 2006 travels will only bring the 1,5% of the unsettled contract already signed.
C) As far as the Trustee concerned:
• It shall guarantee obligations for breach of contract
• Organizers shall underwrite the contract of the administration private trustee
• The percentage on the amount of each individual contract will be the 6% of it.
• The contribution whall be deposited in legal currency in the account under the name of FONDO DE TURISMO ESTUDIANTIL determined by the fiduciary.39
D) The insurance system was adjusted to the following parameters:
• CIVIL LIABILITY
Total: ONE HUNDRED THOUSAND PESOS ($100.000) minimum.
Range: the whole Argentina country (including foreign destinations in case of dealing with them).
Minimum risks: Civil liability. Fire, thunder, explosion, electric discharge, gas leak. Food supply. Civil liability in third parties vehicle transportation.
38 www.cuotacero.com.ar
39 www.turismoestudiantil.gov.ar
• PERSONAL ACCIDENTS + ADDITIONAL COVERAGE
Total: FIFTY THOUSAND PESOS ($50.000) minimum.
Additional Coverage: FIVE THOUSAND PESOS ($5.000) Medical and Pharmaceutical Aid policy.
Range: life and permanent or temporary, total or partial disability coverage for each tourist consumer.
• TRAVELERS´ASSISTANCE
Total: FIVE THOUSAND PESOS ($5.000).
Range: emergency, accrediting register and authorization before the Health Services Superintendency.
E) The group´s coordinators shall meet the following contitions:
• Older than 21 years old with intermediate level or complete secondary studies.
• Criminal record and second offence certificate delivered by the NATIONAL MINISTRY OF JUSTICE AND HUMAN RIGHTS
• Good conduct certificate delivered by the coordinator´s domicile police.
F) Finally, travel obligations shall be:
• To have a coordinator every 35 consumers or fraction.
?A complete list of the contingent delivered by the APPLICATION SYSTEM OF STUDENT TOURISM
• Copy of the underwritten contract with each contingent
• Personal accidents coverage certificate, medical and pharmaceutical assistance and travel assistance record
• Medical records filled in by each tourist´s family doctor
As we can see, the STUDENT TOURISM FUND´s mission is to refund the consumers´ representatives the difference between the payments to the travel agents and services rendered by another trustee, to which the rendor would have aknowledged the payments done by the damaged travel agent. But for this to be possible, it was necessary to set reasons clear:
1. Travel´s cancellation for causes not related with consumers, wihthout force majeure or emergency
2. Travel agent´s manifestation of breach of duties
3. Travel agent´s default on payment of duties assumed with service rendors or the cancellation of the booking of the services hired
4. Facts or omissions provoking uncertainty of the travel or presumption of breach
5. Should any of the previous items happen, and the SECTUR for onerous and urgency reasons thus determines in virtue of the powers granted by art. 37 of Law N° 25.997 and other regulations in force.
REGULATORY EVOLUTION OF STUDENT TOURISM
Rule Date Issue
Res. 135 04/24/1987 Student Tourism information to the Application Authority
Res. 159
Repealed by Res. 187 and ratified by Res. 118 04/12/89 Requirements extension
Law 25.599 05/23/2002 National Student Tourism Law
Decree 1013 06/13/2002 Observaciones a la ley nacional de Turismo Estudiantil
Res. 175
Repealed by Res. 187 and ratified by Res. 118 01/29/2003 Devicing of the Certificate and instruction set
Act 35
Modernization and Competitivity Management – Repealed by Res. 187 and ratified by Res. 118 02/24/2003 Devicing of the model of Certificate
Res. 187 Repealed by 118 03/09/04 New requirements for the Certificate
Res. 118
02/08/2005 Certificate delivery system
Res. 987 08/24/2005 Amendment to Res. 118 Updated fees for the submision of application forms.
Res. 274 03/22/2006 Amendment to Res. 118 States that requested certificates shall be delivered from March 2nd of each year or following working day.
Res. 451 05/12/2006 Amendment to Res. 118 Demands the submision of Affidavits for sesrvices bound for the next year and difered application forms for 180 days.
Law 26.208 12/20/2006 Amendment to Law 25.599
Res. 237 03/15/2007 Passes new Student Tourism Regulation
To work interdisciplinary
