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420. Co-operative legislation finds a home in more nations

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Coop Name: International Labour Organization
City: Gen
Country: Switzerland Year of formation: 1919
Website: http://www.ilo.org/empent/units/cooperatives/lang--en/index.htm
About this coop:

The ILO views cooperatives as important in improving the living and working conditions of women and men globally as well as making essential infrastructure and services available even in areas neglected by the state and investor-driven enterprises. Cooperatives have a proven record of creating and sustaining employment – they provide over 100 million jobs today; they advance the ILO’s Global Employment Agenda and contribute to promoting decent work.

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“Our main objective is to increase the prosperity and welfare of our people by means of economic development and improvement. Within this respect, one of the important means contributing to activating our policies on a social state is the cooperatives entrepreneurship. Cooperatives have gained an international identity in time and have become successful initiative models which have specific positive signs in the economic and commercial life. Cooperatives have become an integral part of economic and social development model of our time since they have the capacity to combine social responsibility and civil society values with a free enterprise approach in their organization. A cooperative, one of the most efficient development means today, not only makes economic and social contribution to manufacturers, consumers and small enterprises but also provides added values to the national economy.” Hayati YAZICI, Turkey’s Minister of Customs and Trade in a new manifesto on cooperative development in Turkey.

The cooperative movement has witnessed a number of positive steps in terms of specific cooperative legislation being introduced. In Indonesia, cooperative legislation has been reformed, as it has in India with Indian President Pranab Mukherjee calling for the states to implement laws bringing them into line with the new national legislation, and it is on the way to being reformed in Vietnam. And in Turkey a national cooperative strategy and action plan, as illustrated above, which took five years to be developed through consultations has just been launched.

Legislation is not enough, says Simel Esim, head of the International Labour Organization’s Co-operative Unit, but a cooperative policy framework is often needed for enacting legislation. Many countries do not have the policy frameworks. Even when they do, the budgetary allocations are not in place to bring about the changes outlined in legislation.

“Also, it is about harmonizing relevant legislation and policies that affect the performance of cooperatives,” says Esim. “And the main national development policies like trade and agriculture need to integrate the cooperative enterprise governance model, while the diversity and complexity of coop models, large and small need to be taken into account.”

Financial and investment policies are therefore also important in terms of the critical issue of capital requirements of cooperatives and their ability to finance themselves.

Esim says there needs to be policy co-ordination and cooperation to ensure that the different policies and programs have policy coherence with respect to cooperatives. “This is so they are not enabling on the one hand and curtailing on the other,” she explains.

There are the added complications, as there were in Turkey, when multiple legislations on cooperatives are managed by multiple ministries which can create discrepancies.

Striking the balance, says Esim, and creating an enabling environment where cooperative enterprises can thrive, while not interfering and imposing, is a tricky business.

“We continue to have a lot of examples of countries where the government involvement is far beyond an enabling environment and instead verges on control. The ILO’s recommendation 193 is excellent to ensure that balance exists to ensure autonomy and independence of cooperatives.” Esim notes that 70 countries have revised their cooperative legislation in line with the provisions in the recommendation. And the direction has been toward more autonomy and independence.

The ILO strides on in its work in support of the cooperative business model. In coming weeks in Sri Lanka a workshop will be held on reforming cooperative legislation in that country and and ILO project in this country is backing its development.

Read the recently released ILO Guidelines for cooperative legislation here.

Author of this story
Kate Askew
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