Preface

In December, 1996 the Secretary-General of the United Nations was requested by the UN General Assembly in its resolution, Role of Cooperatives in Light of New Economic and Social Trends A/RES/51/58 to:

ascertain, in cooperation with the Committee for the Promotion and Advancement of Cooperatives,
the desirability and feasibility of elaborating United Nations guidelines aimed at creating
a positive environment for the development of cooperatives and to include his findings and
recommendations in his report...

COPAC believing that Guidelines were both desirable and feasible initiated a process to draft COPAC recommendations for Guidelines for Cooperative Development. A Consultation Meeting on UN Guidelines on Government Policy Concerning Cooperatives was held in May, 1997 to gather the views of COPAC member organizations, cooperative legal experts and cooperative development practitioners. This document is the result of that consultation process and a wider circulation of the document to cooperative organizations worldwide.

COPAC finalized this report at its meeting in October 1998 and transmitted the report to the Secretary-General in December 1998 - its contribution to the UN Secretary-General´s Report on Cooperatives. It is hoped that the UN will include these Guidelines as an annex to the report. The UN Secretary-General´s report will be published in early 1999 and submitted to the UN General Assembly at its 54th Session for adoption

Finally, COPAC would like to thank Mr. Michael Stubbs for his invaluable contribution to the report.

Geneva, December 1998

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Established as an inter-agency committee, COPAC is an on-going partnership between representatives of the cooperative movement including farmers´ and workers´ organizations, and the United Nations and its agencies, Members include: Food and Agricultural Organization of the United Nations (FAO), International Co-operative Alliance (ICA), International Federation of Agricultural Producers (IFAP), International Labour Office (ILO), International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations (IUF), United Nations (UN) and World Council of Credit Unions (WOCCU).

GUIDELINES AIMED AT CREATING A SUPPORTIVE ENVIRONMENT
FOR THE DEVELOPMENT OF COOPERATIVES

Objectives

1. Within the General Assembly and the Economic and Social Council, and at major recent international conferences, Governments have acknowledged the significance of cooperatives as associations and enterprises through which citizens effectively overcome a wide range of problems and achieve many of their goals. They have recognized the cooperative movement as a distinct and major stakeholder in both national and international affairs.

2. Governments recognize that the cooperative movement is highly democratic, locally autonomous but internationally integrated, and a form of organization of associations and enterprises whereby citizens themselves use self-help and self-responsibility to meet goals that include not only economic but social and environmental objectives, such as overcoming poverty, securing productive employment, and encouraging social integration.

3. Consequently, Governments seek to support the cooperative movement and to work closely with it to develop an effective partnership to achieve their respective goals. Policies setting out the objectives and means of support and collaboration are valuable instruments for ensuring that the potential of cooperatives for meeting the individual goals of citizens who are members, and through this the aspirations of the wider societies of which they are a part, is realized.

4. However, such policies can be effective only if they take into account the special character of cooperatives and the cooperative movement. This differs significantly from that of associations and enterprises not organized according to cooperative values and principles.

5. The objective of these Guidelines is to provide advice to Governments that is appropriate to contemporary and anticipated conditions. Because of the expectations shown by Governments in recent years in respect to the cooperative movement, rapidly changing global conditions and changes in the cooperative movement itself, many policies in most of the States members of the United Nations might benefit from review, and in some cases from substantial revision. Given the relevance of cooperatives to many aspects of national life, as well as the special nature of cooperative organization, policy in respect to cooperatives may be complex and sensitive. It is the purpose of these Guidelines to set out succinctly the principles on which national policy might best be based, and the scope and content likely to suffice as a framework for the necessarily more specific and detailed national policies which fall within the responsibility of each Government.

Policy in Respect to Cooperatives and the Cooperative Movement

6. The objective of policy is to ensure that cooperatives, recognized as legal entities, are assured real equality with other types of association and enterprise, and this equality is extended to all organizations and institutions set up by the cooperative movement. Enjoyment of such equality requires that the special values and principles of cooperative organization, expressed in the particular forms taken by cooperative organization, receive full recognition as desirable and beneficial to society, and that appropriate measures are taken to ensure that their special qualifies and practices are not the cause of discrimination and disadvantage of whatever type.

7. To achieve this objective, government is concerned with creating - and then with maintaining as conditions change - a supportive and enabling environment for cooperative development. As part of such an environment, it is useful if every effort is made to create and maintain an effective partnership between Government and the cooperative movement.

A. Public Recognition

8. It is appropriate and useful for Government to acknowledge publicly the special contribution - in both quantitative and qualitative terms made by the cooperative movement to the national economy and society. It is also beneficial that Government acknowledge and publicise the purposes of all forms of partnership and collaboration between it and the cooperative movement. A number of specific actions may be useful of which one might be full participation in the annual joint observance of the United Nations International Day of Cooperatives and the International Cooperative Day organized by the International Co-operative Alliance, pursuant to General Assembly resolutions 47/90, 49/155 and 51/58; and appropriate participation in other celebrations of the cooperative movement.

B. Legal, Judicial and Administrative Provision

9. Appropriate provision is necessary within law and both judicial and administrative practice if these most important areas of the environment in which cooperatives exist are to contribute positively to the supportive and enabling nature of that environment Legal provision may take various forms appropriate to the national legal system, it should address the status, rights and responsibilities of cooperatives and the cooperative movement in general, as well as, if appropriate, those of special categories of cooperatives or of distinct aspects of cooperation.

10. National Constitution This could acknowledge, if appropriate, the legitimacy of cooperatives and the cooperative movement and the utility of their contribution to national life.

11. General Law on Cooperatives or the general section of a single Law on Cooperatives. This should form the basic element in legal provision and the fundamental point of guidance for all judicial and administrative practice. Participation by representatives of the cooperative movement in its formulation would a valuable means to ensure its relevance and utility. It should acknowledge the nature of cooperation and its utility, set out criteria for treatment of cooperatives in law and define the nature of governmental responsibilities as well as the rights and responsibilities of the cooperative movement. It should include the following basic set of acknowledgements, definitions and provisions, certain of which might be set out in a preambular section:

• acknowledgement that the organization of associations and enterprises on the basis of cooperative values and principles is legitimate;
• · acknowledgement of the utility of the cooperative approach to association and enterprise, its contribution to national life and the status of the cooperative movement as a significant stakeholder within society;
• definition of cooperatives, using the ´Statement on the Cooperative Identity´ adopted by the International Co-operative Alliance in 1995;
• recognition of the unique nature of the values and principles of cooperation, and hence the need for their separate and different treatment in law and practice;
• commitment that neither their distinctive nature nor their separate and different treatment in law and practice should be the cause of discrimination, intended or not;
• undertaking that no law or practice should restrict the rights of citizens to full participation in the cooperative movement in any capacity consistent with its values and principles and should not restrict the operation of that movement;
• provision that a general law apply to all categories of cooperative, but that in order to respond to the situation of certain categories of cooperative special laws might be enacted, consistent with the general law;
• stipulation that all judicial and administrative regulations and practices be based only on the general or special laws on cooperatives; that all regulations clearly identify the provision of the law on which they are based and the purpose for which they are made;
• recognition of the full autonomy and capacity for self-regulation of the cooperative movement;
• acknowledgement that intervention by Government in the internal affairs of the movement should be strictly limited to measures applied generally to all associations and enterprises equally in order to ensure their conformity with the law. Adjustments may be made only to ensure real equality in treatment;
• definition of the responsibilities of the cooperative movement for self-regulation in all matters distinctive to it:
• provision that the texts of laws and regulations be made available to all cooperative members and employees;
• provision that representatives of the cooperative movement participate fully in drafting special laws or judicial or administrative regulations and guidelines concerning practice;
• provision for the maintenance of a public register of cooperatives as a part of procedures for registration of all associations and enterprises;
• provision for procedures for continuous monitoring and regular review of law and practice which would include the full and equal participation of representatives of the cooperative movement and for encouragement of research on the effect of law and practice on the environment for cooperatives;
• establishment of the responsibility of Government to formulate and carry out a policy in respect to cooperatives that would seek to establish a supportive and enabling environment while avoiding any infringement of the autonomy of the movement and any diminution of its capacity for responsible self-regulation, and would seek also to engage in an effective and equal partnership with the movement in all matters where it is able to contribute significantly to the formulation and carrying out of public policy; recognition also of the value of governmental support for the international cooperative movement, including through intergovernmental activities;
• definition of the responsibilities of the cooperative movement as a major stakeholder in society, to the extent these may be consistent with its full autonomy. These include making available its experience in self-reliant, people-oriented and community-based organization of associations and enterprises.

12. Special Laws on Certain Categories of Cooperatives:These must be consistent with the basic provisions set out in either a general law or in the preambular and initial sections of a single law where neither exist. Each special law should provide the same set of such basic provisions. They may be necessary when the distinctive nature of cooperatives require special provision in law to safeguard their autonomy while achieving their equal although different inclusion in generally applicable regulations. This is often the case in respect to financial cooperatives.

13. Judicial and Administrative Practice concerned Explicitly with Cooperatives: These must be consistent with the general law on cooperatives, and specifically with its provisions concerning such practice.

14. All Other Laws and Practices insofar as they may have an effect on Cooperatives: Many laws and judicial and administrative practices may affect the environment in which cooperatives operate, whether intentionally or not. Relevant governmental bodies should make every effort to exclude any discriminatory or prejudicial impact. Responsibility for identifying cases needing revision lies also with the cooperative movement. Government bodies should assist by making available the full text of drafts of proposed laws or regulations as well as any evaluation of their impact.

15. Monitoring, Review and Revision of Laws and Judicial and Administrative Practices: This is necessary to ensure that their impact on the cooperative movement is entirely positive. If identified, discriminatory provisions should be rendered inoperative as quickly as possible pending enactment of revised laws or issuance of revised regulations and guidelines concerning practice. This process should have as its purpose the early and complete disengagement by governments form the internal affairs of cooperatives and the cooperative movement, where this still exists, and full operational realisation of the principles that cooperatives, although different, are equal to other business enterprises and civil associations.

16. For these purposes formal procedures for consultation and collaboration should be set up, and should include regular and full participation by the cooperative movement. Advantage may be taken also of the special programmes and guidelines offered by specialist international cooperative organizations and intergovernmental organizations.

C. Research, Statistics and Information

17. Research: Given the significance of the cooperative movement, its own research and development programmes and the active role of Government in supporting research generally, it is appropriate to undertake the following measures:

• recognition of the contribution of the cooperative movement itself, and hence disengagement from any direct intervention other than that applied to any recipient of public funding;
• provision for equal access with other types of association, enterprise or movement in respect to public funds;
• collaboration between governmental and cooperative movement research on matters relevant to public policy; publication and wide diffusion of research results, including those produced by the international cooperative movement and intergovernmental organizations, including the United Nations.
• Emphasis should be on applied research of immediate utility in improving the efficiency of cooperatives, extending benefits to society and improving partnerships between movement and Government.

18. Statistics: Several measures may be undertaken to improve statistics for and about cooperatives:

• extend technical support provided by the national statistical service to the cooperative movement to an extent at least equal to that provided to other major stakeholders;
• assist in preparation of the annual report of the register of cooperatives;
• undertake preliminary studies on which to base integration of statistics on cooperatives in regular programmes of the national statistical service, and participate in international efforts to improve cooperative statistics, including establishment of a uniform set of definitions for use by national statistical services.

19. Information: Given that Government regulates and broadly influences information diffusion, a number of measures may be useful in expanding knowledge of the cooperative movement and of overcoming prejudices and misconceptions:

• extension of technical and financial assistance to an extent equal to that made available to other stakeholders, ensuring that no discrimination exists because of the special nature of cooperatives;
• equal and non-discriminatory access by the cooperative movement to all public media commensurate with its contribution to national life;
• adoption of affirmative action to overcome prejudice and misinformation where the term cooperative is associated with a previous and inappropriate usage;
• diffusion through public media of material on inter governmental activities undertaken in partnership with or in support of cooperatives;
• dissemination of printed and computer-based information prepared by Government of intergovernmental bodies with the same priority and resources as allocated to information on other stakeholders.

D. Education

20. Given the important contributions of the cooperative movement to education, a number of supportive and enabling measures might be useful:

• acknowledgement of the contributions made;
• commitment to non-interference in the movement's own programmes other than those generally applied in order to maintain standards in all educational institutions; and avoidance of discrimination in certification and accreditation;
• support for all forms of collaboration and partnership between cooperative and public systems, and assurance of equality with other types of private education (where this exists) in respect to eligibility for public funds;
• consideration of the option constituted by cooperative organization in any programmes of privatization;
• encouragement of student self-reliance by facilitating their formation of cooperatives for the supply of goods and services, including accommodation;
• encouragement of formation by public educational institutions of purchasing, supply and common service cooperatives; and assurance of equal access by cooperatives with other suppliers.
• inclusion within the national curricula at all levels of the study of the values principles, history, current and potential contribution of the cooperative movement to national society;
• encouragement and support of specialist studies of cooperation at tertiary level.

E. Provision of Public Funds

21. Financial self-reliance, unrestricted self-responsibility and full independence are vital for effective cooperative enterprise. The best policy approach is one where cooperatives receive the same treatment as any other form of enterprise. A number of other measures are valuable:

• acknowledgement and protection of the special character of cooperatives, and avoidance in law or practice of any discrimination arising from the special financial status, organization and management of cooperatives;
• avoidance of any direct or indirect engagement in the internal financial affairs of cooperatives or of the cooperative movement and recognition of the self-responsibility of the movement for its own financial affairs;
• development of partnerships with cooperative financial institutions in such masters as community and regional development, drawing on their experience of mobilizing and managing capital in a manner and for purposes conducive to the public good.

F. Institutional Arrangements for Collaboration and Partnership

22. Many departments and bodies in Government will have contact with the cooperative movement, while a policy of enabling and supporting cooperatives and operating an effective partnership with the movement will involve actions by a wide range of governmental institutions. In order to ensure consistency with broad general policy certain coordinating functions within Government, as well as liaison with the cooperative movement, will be useful.

23. It is advisable that a single department or office assume central coordinating, focal and liaison functions, of which the following might be most important:

• elaboration of a single national comprehensive policy in respect of cooperatives, formulation of guidelines for consistent execution throughout Government, and monitoring and review of that execution;
• collaboration with legal departments in drafting the general and any special laws;
• liaison, consultation and collaboration with the cooperative movement.

24. The most effective organizational location for the responsible entity would be within a department already charged with broad strategic and co-ordinating functions, such as the office of a prime minister or president, or that responsible for economic management of development planning.

25. An institutional arrangement appropriate to national conditions which would permit effective collaboration between Government and the cooperative movement would be valuable.

26. Liaison between intergovernmental programmes and the international cooperative movement should be supported, including particularly that achieved through the Committee for the Promotion and Advancement of Cooperatives (COPAC).

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Updated: 15 December 1998