Report Sectoral and Thematic Seminar. Creating an Enabling Environment for Cooperatives through Legislation, Regulation and Policy Reform
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1 Report Sectoral and Thematic Seminar Creating an Enabling Environment for Cooperatives through Legislation, Regulation and Policy Reform International Cooperative Alliance General Assembly Cancun, Quintana Roo, Mexico November 16, 2011 Taking advantage of the launch of the 2012 United Nations International Year of Cooperatives during the International Cooperative Alliance (ICA) General Assembly in Cancun, Mexico (November 14-19, 2011), which brought together over 2000 national cooperative leader delegates from over 76 countries, a three hour seminar was organized around this unique opportunity for national cooperative movements to focus on their reciprocal relationship with UN member states through cooperative law, regulation, and policy all which have a direct impact on cooperative development. On Wednesday, November 16, 2011 from 2:00 5:00 p.m. a seminar entitled Creating an Enabling Environment for Cooperatives through Legislation, Regulation and Policy Reform was held with over 200 national cooperative leader delegates in attendance. The session focused on various initiatives around the world which aim to create a more enabling legal, regulatory and policy environment for cooperatives to fully realize their potential. Among the distinguished speakers included academics, experts and practitioners from the cooperative movement as well as government officials in cooperative regulatory and legislator roles. Agenda Summary: The session began with an introduction to cooperative law, emphasizing its relevance and impact on cooperative development, as well as key issues and needed actions for reform. Second, a cooperative regulator and legislator discussed their efforts to bring about change and improvements within their respective regulatory and legislative areas of government. The third session introduced the CLARITY initiative, a grassroots-oriented approach for cooperative legal and regulatory reform by national cooperative movements through understanding, analyzing and evaluating their law, then developing proposals for change and advocating for reform. Finally, a presentation featuring the Model Cooperative Law initiative in Latin American as well as a unique program involving national legislators in a Cooperative Parliamentarian Network in Latin America were given. Presentations focused on practical applications and resources available to national co-operative movements, including case studies, publications, model laws, guidelines and other information. Inauguration: The session began with an opening ceremony featuring greetings from the ICA- Americas Chairman, Ramón Imperial, and ICA Chair Dame Pauline Green who extolled on the critical role of cooperative legal and regulatory reform in promoting cooperative development. Other guests at the main table were Senator Jorge Andrés Ocejo Moreno from Mexico; Hon. Joseph W.N. Nyagah, HGE, MP, Minister of Cooperative Development and Marketing in 1
2 Kenya; Mr. Manuel Mariño, Regional Director of ICA Americas in Costa Rica; Dr. Dante Cracogna, Member of the ICA Legislative Work Group, and Mr. Edward Potter, Executive Director of ICMIF/Americas. The first presentation entitled A Panorama of Cooperative Law Around the World was given by Dr. Dante Cracogna, Senior Professor School of Law, University of Buenos Aires and Member of the ICA Legislative Working Group. Among the highlights of Dr. Cracogna s presentation included the origins of cooperative legislation, which began 159 years ago as a new model of economic enterprise faced numerous distinctive legal problems which required separate laws; different models of legislation which reflected the attitude of the State towards cooperatives (in industrialized countries, it was indifferent, in developing countries it was interventionist, and in centrally planned economies domineering); the ICA and cooperative legislation, particularly how the universal doctrinal authority of the ICA had the legal consequence of becoming the doctrine as a source of law through cooperative principles and values; and the role of international organizations such as the United Nations which promoted guidelines for the creation of a favorable environment for cooperative development through General Assembly Resolution A/56/73, and International Labor Organization, particularly Recommendation 193/02 which adopt specific legislation and regulations on cooperatives; and finally trends and current problems, which include regional integration (i.e. harmonization of cooperative law in the E.U. and Mercosur countries); functions of the state in relation to cooperatives (registration, supervision and promotion); tendency toward identification with either commercial organizations (to ensure equal treatment) or public-benefit organizations (for their social purpose); the problem of capital (structural weakness of cooperative capital and the search for solutions, application of incompatible methods with the nature of cooperatives, formation of reserves, accounting treatment of capital), cooperative self-determination, discrimination, among others. Dr. Cracogna concluded that cooperatives are distinctive businesses requiring legislation appropriate to their nature; they require legislative participation (advocacy) and non-discriminatory treatment in relation to other businesses, as well as independence from the State. The second session, entitled Perspectives on Cooperative Legislative and Regulatory Trends and Reform. The first speaker was the Hon. Joseph W.N. Nyagah, EGH, MP, Minister for Cooperative Development and Marketing, Kenya who also currently serves as Chairman of the Africa Cooperative Interministerial Committee. Minister Nyagah spoke about the relationship between governments and the cooperative movement within the context of Africa as well as several areas the he and other African cooperative ministers are working collaboratively to advance cooperative development, including: structure and organization of the co-operative movement, where ministers agreed to re-evaluate their structure in order to strengthen their cooperative apex bodies; co-operative development policy and legislation, where ministers agreed that ILO Recommendation 193 should guide the preparation of Co-operative Policy and Legislation; cooperative finance - recommendation that all countries should work towards an integrated cooperative financial system, of which several examples were cited in Kenya, South Africa, Malawi and Ghana; gender equity policies which observed that there is a perpetual gender imbalance within the co-operative movement in Africa and recommended all member 2
3 countries to take affirmative action; participation of youth in cooperatives which observed that youth representation in co-operatives was unacceptably low, so many countries have taken up the challenge to promote formation of youth cooperatives and encourage youth participation in the existing cooperatives; member empowerment where cooperative members need to understand their rights and obligations adequately in order to participate effectively in the management of their co-operative institutions; development of human resources, where there is need to upgrade capacity of cooperative managers and members through continuing education and universities; and strengthening of regional cooperation. African ministers have also agreed to focus on other issues such as information communication technology, research and development, concern for community and HIV/AIDS. In closing, Minister Nyagah said the way forward for cooperatives included the following actions: 1) lobby the UN to declare a Decade, not one year, for the Cooperative Movement; 2) improve the level of cooperation through movement to movement business partnerships; 3) intensify the level of training for cooperatives; 4) lobby business schools globally to introduce the cooperative business model in the curriculum; 5) strengthen cooperative apexes in African countries to provide the necessary lobby and investment structures; 6) enhance efforts on research and development; 7) affiliate co-operative organizations to regional government organizations, such as African Union; and 8) lobby governments in Africa to establish cooperative specific ministries. The second speaker was Sen. Jorge Andrés Ocejo Moreno, nationally elected member of the Chamber of Senators in the General Congress of the United States of Mexico. As Chairman of the Senate Economic Development Commission, as well as member of the Senate Commissions for Trade and Industrial Development, Senator Ocejo clearly recognizes the important role that cooperatives businesses play in generating affordable and accessible products and services to underserved populations and creating opportunities for employment in Mexico. Senator Ocejo s presentation provided context on the Mexican cooperative movement, its particular strengths and challenges, as well as current efforts to strengthen the cooperative sector through public policy development. The third session focused on A Grassroots-Based Approach to Cooperative Legal and Regulatory Reform: The Cooperative Legal and Regulation Initiative (CLARITY), led by Dr. Barbara Czachorska-Jones, Director of Operations, Policy and Innovation at CHF International and Mr. Edward Potter, Executive Director at ICMIF/Americas. An initiative led by 8 U.S.-based international cooperative development organizations, CLARITY offers a series of activities and tools designed to help a national cooperative movement organize themselves to 1) understand, analyze and evaluate their cooperative law, 2) develop proposals and strategies for change, and 3) put those proposals into action through advocacy and outreach activities to protect their rights and interests and bring about cooperative legal and regulatory reform. Among the main conceptual tools to assist national cooperative movements understand, analyze and evaluate cooperative law are 9 CLARITY Core Principles. These principles reflect three broad themes which include a) the need for cooperatives to protect and promote member democratic control (Principle 1. Protect democratic member control, Principle 2: Protect autonomy and independence, Principle 3. Respect voluntary membership, and Principle 4: Require membership economic participation), b) the need for cooperatives to promote equitable 3
4 treatment of cooperatives in the economy (Principle 5: Promote equitable treatment, Principle 6: Promote access to markets) and finally c) the need for cooperatives to minimize regulatory disadvantages (Principle 7: Provide coherent and efficient regulatory framework, Principle 8: Protect due process, and Principle 9: Avoid conflicts of interest). CLARITY principles are based on universally accepted ICA Cooperative Principles and Values which refer to internal affairs and issues of cooperatives (Principles 1-4), in addition to other principles referring to external affairs and issues of cooperatives (Principles 5-9), as well as what is required for successful implementation of cooperative legal reform (education, training and information; cooperation among cooperatives, and care for community). Using the 9 CLARITY Core Principles, a series of conceptual tools and processes have been developed including: 1) Analytical Rubrics (matrices) to assist with the analysis of specific aspects of cooperative law using the 9 CLARITY Core Principles; 2) a CLARITY Score Card, or a set of rubrics which show the degree to which the law is in compliance with CLARITY Principles; 3) Profiles and Case Studies of various countries describing efforts in cooperative legal reform; and 4) Cooperative Environmental Assessment Tool to develop a big picture overview of a national cooperative sector s scope and impact. The next step of the CLARITY process under development is to adopt a methodology for advocacy strategy development and implementation, identify best practices in cooperative advocacy, good/bad advocacy practice case studies, training materials and other resource and reference materials. A publication summarizing these advocacy tools is scheduled to be launched at next year s ICA Expo, from October 31-November 2, The fourth and final session focused on Approaches for Cooperative Legislation Reform: Cooperative Model Law and Cooperative Parliamentarian Network. Mr. Manuel Mariño, Regional Director of ICA-Americas in San José, Costa Rica, gave an overview of the Cooperative Parliamentarian Network, a collaborative effort promoted by the International Cooperative Alliance of the Americas (ICA-Americas in San José, Costa Rica) and the Latin-American Parliament (based in Panama City, Panama). The Cooperative Parliamentarian Network members are composed of active legislators in different countries across the Americas that are designated by their respective national networks of cooperative parliamentary members. The objectives of the Cooperative Parliamentarian Network are: a) to support the ideals and intentions of the cooperative movement represented by the ICA-Americas and its affiliated organizations in the Americas; b) to promote harmonious and collaborative relations between the national parliaments and the cooperative movements of each country; c) to promote a legislative environment favorable to cooperative development; d) to follow the legislative processes in topics of interest for the cooperative movement; e) to support relations, communication and collaboration with the Latin-American Parliament and regional parliaments, as well as with the European Parliament; and f) to promote the constitution of national networks of cooperative parliamentary members in the countries where they did not exist. Mr. Mariño provided a brief overview of accomplishments and declarations made by the Cooperative Parliamentarian Network to promote enabling cooperative public policies and legislation throughout Latin American countries. 4
5 Sen. Luis Rubeo, Secretary of the Consultative Council of the Latin American Parliament and Former National Senator, National Congress of Argentina provided a testimonial based on his experience with the Cooperative Parliamentarian Network which highlighted the importance of the cooperative sector and the relationships that can be maintained with government authorities to have an adequate credit regulatory framework, and that enables them to develop and build for the benefit of its partners and Associates, but also for its contribution to the economic and social development in their countries. In the final presentation, Dr. Dante Cracogna discussed a major project focusing on a Model Law Framework for Cooperatives in Latin America, an initiative funded by the International Labor Organization. In 1987, the Organization of Cooperatives of America (OCA) decided to contribute to the development of cooperative laws in the Latin American countries through a Cooperative Model Law Framework which would guide the updating of their corresponding countries laws. For this purpose, a group of experts from different countries in the region who met during two seminars and laid the foundations of the document, and then the coordinators drafted the document to submit it to the consultation of cooperative leaders and specialists on the topic. Finally, the Framework Law on Cooperatives in Latin American was approved by the assembly of OCA held in November, Thereafter, the Cooperative Model Law Framework was widely disseminated and used to amend cooperative laws in numerous Latin American countries and stimulating at the same time the renewal of specialized studies and the advancement of cooperative law in general. With to changes with the ICA Cooperative Identity, Principles and Values in 1995 and other legal developments over time, the text was consequently updated and published in Not intended to be a model copied by the Latin American lawmakers, the Cooperative Model Law Framework s purpose is to provide orientation and guidelines of cooperative legislation as derived from legal jurisprudence, academic studies, and the most up to date practice of comparative law. It is focused for a general cooperative law referring to all types of cooperatives. Even though it contains certain specific provisions relating some of them, it is intended to provide regulatory provisions for any type of cooperative regardless of its purpose. The Cooperative Model Law Framework Law has 102 sections and is organized in 12 chapters, each dealing with a specific topic, following a logical sequence that starts with general provisions and then deals with the incorporation, members, the capital structure, the corporate bodies, and the cooperative integration and, finally with the dissolution and liquidation. The final chapters deal with the government institutions in charge of monitoring and public policy on cooperative issues. Based on the experiences of the Cooperative Model Law Framework, Dr. Cracogna made several conclusions: 1) the important need for adequate cooperative legislation; 2) recognition in cooperative law of the eessential doctrinal nature of cooperatives and adaptation to cooperatives business requirements; 3) the desirability of generic legislation with rules on special classes of cooperatives; 4) alignment of cooperative law within the national realities, taking into account comparative experience; and the 4) the importance of the participation of the movement in the legislative process. 5
6 The program agenda was developed by Edward Potter, Executive Director of the International Cooperative and Mutual Insurance Federation/Americas Regional Association (ICMIF/Americas) in the USA and Dr. Dante Cracogna of the University of Buenos Aires School of Law, in coordination with Manuel Mariño, Regional Director of ICA-Americas in San José Costa Rica, and Dr. Hagen Henrÿ, Adjunct Professor and Research Director at the Ruralia Institute, University of Helsinki. The seminar organizers wish to express their appreciation to funders whose financial support made this educational event possible, including the International Labor Organization (EMP/COOP Branch) and U.S. Agency for International Development s (USAID) Cooperative Development Program. 6
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