Supporting the growth of co-operatives through legislation

In a special series of articles, eDigest is examining the Blueprint for a Co-operative Decade to see how each theme is currently being supported by co-operatives . . .

One of the strongest arguments put forward to support the growth and development of co-operatives is that the business model should be on a level playing field compared with other types of business.

At the launch of the International Year of Co-operatives at the United Nations, New York, in October 2011, Dame Pauline Green, ICA President, told representatives from around the world: “Member-owned co-operatives are a serious business model – with scale. And so, co-operatives are asking that the specific and unique legal and financial framework of a co-operative is fully acknowledged and recognised in public policy and regulation.”

She added: “Co-operatives are asking that there should be a greater diversification of the global economy, to ensure a level playing field for the member-owned model of business.”

The Blueprint argues that to enable co-operatives to grow then certain barriers, generally contained within national laws, need to be removed. It added that financial, legal and regulatory infrastructures are designed for the greater majority of businesses which are profit-oriented, which are inappropriate for co-operatives.

Guidelines already exist for governments in the form of the International Labour Organization’s Promotion of Co-operatives Recommendation (193), which says nations should provide a supportive policy and legal framework guided by co-operative principles. It adds that governments should promote co-operatives for a range of purposes including the creation of employment and income generating activities.

In 2009, the Indian government amended its constitution through its Constitution (111th) Bill, which made the right to form co-operative societies a fundamental right. Last year, the United Kingdom government said it would consolidate co-operative legislation, while new legislation has been set up in Brazil, Cuba and Peru.

In order to forward the goal for supportive legal frameworks, the Blueprint outlines a number of actions including providing assistance for regulators through a support network; and by providing a study of how other countries adopt co-operative laws for policy-makers.

Recent initiatives by the ICA in this area include the ability for government agencies and regulators to become associate members of the ICA, which will eventually form part of a forum for the input and exchange of ideas. Also a network of Global Co-operative Parliamentarians, based on an existing Latin America Parliamentarian Association, is being built to identify legislators sympathetic to co-operative principles.

• To find out more about this chapter, download the Blueprint for a Co-operative Decade: http://ica.coop/en/blueprint