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As preparation for review of ILO Recommendation 127 on the "Role of Cooperatives in the Economic and Social Development of Developing Countries", adopted in 1966, the ILO has prepared a report on the promotion of cooperatives. The report is part of the International Labour Conference documentation. The report is avialable in English, French and Spanish in both printed and electronic format (PDF).
In order to promote the dissemination of the ILO Report: Promotion of Cooperatives, COPAC has included an excerpt of the introduction of the report.
For more information, please contact the ILO Coop Branch.Decision to revise the Cooperatives (Developing Countries) Recommendation, 1966 (No. 127)
In March 1999, at is 274th Session, the ILO Governing Body decided to include in the agenda of the 89th Session (2001) of the International Labour Conference the question of the promotion of cooperatives, with a view to adopting a revised standard in the year 2002.
The last comprehensive discussion on cooperative in the ILO took place in 1966 at the 59th Session of the International Labour Conference, when it adopted the Cooperatives (Developing Countries) Recommendation, 1966 (No. 127). The ILO held a Meeting of Experts on Cooperatives in 1993 whose agenda included an item concerning an assessment of the impact of Recommendation No. 127. The meeting was followed by the Meeting of Experts on Cooperative Law in 1995, at which this was further discussed.
A number of international labour standards make direct or indirect reference to cooperative, but the only comprehensive international standard on cooperatives is Recommendation No. 127. Also of relevance are the Rural Workers´ Organisation Convention, 1975 (No. 141), and Recommendation (No. 149), the Employment Policy (Supplementary Provisions) Recommendation, 1984 (No. 169). These standards given examples of how specific groups may organize, including in the formal of a cooperative, and to what ends cooperative may be used by their members, or they emphasize that groups living according to cultural traits which are not the ones of the majority of society should be protected in their way of organizing self-help associations, including cooperatives.
Reasons for the Revision
Since the time of the adoption of Recommendation No. 127, political, economic and social changes have affected the situation of cooperatives throughout the world. While cooperatives have anew role to play both in industrialized countries and in the former communist countries, the focus of Recommendation No. 127 is limited to developing countries. The Governing Body felt that new universal standards in this area could help enable cooperative to develop more fully their self-help potential, placing them in a better position to meet a number of current socio-economic problems, such as unemployment an social exclusion.
As far as developing countries are concerned, Recommendation No. 127 mirrored the development concerns of the 1960´s, especially in the approach to the role of governments and cooperative in the development process. Today, development is not conceived as a process of imitation of industrialized countries, nor are cooperatives seen as tools in the hands of governments. In accordance with universally recognized cooperative principles, they are perceived as a means for their members to achieve their common economic and social goals.
In former communist countries cooperatives were an integral part of the political system, a means of centralizing land use, employing agricultural labour and distributing consumer goods. The current privatization of the former communist economies reaches beyond the land reform referred to in Recommendation No. 127; it involves the privatization of manufacturing facilities and service infrastructures. Some communist-type cooperatives have been transformed into genuine cooperatives, while others have been bought our by individuals or by former members jointly. Since cooperatives have assumed an increasingly important role as a result of liberalization and the privatization of trade an services, the ILO is receiving an increasing number of requests from both developing and transition counties for technical assistance in cooperative organization, training and policy and legislative reform.
In industrialized countries it is the changing structure of cooperative enterprises and new forms of cooperatives that have contributed to the call for the application of new standards. The traditional structure of cooperative in many of these countries is currently evolving to cope more effectively with competitive pressure from other forms of business organization. On the other hand, the cooperative model of joint ownership and management is increasingly being used by employees to buy out their own enterprises in the transport, service and manufacturing sectors, as a means of protecting and generating jobs in an era of continued down sizing resulting from globalization and technological change.
In many countries, political, economic and social changes in general have put pressure on governments to limit their involvement in economic and social affairs. The core idea of structural adjustment programmes is a shift from public to private initiative, financing, management and responsibility. Subsequent monetary and fiscal stabilization programmes, institution building, privatization, and liberalization require civil society to take a more active role in economic, social and political affairs. The State´s role is increasingly limited to that of providing the political, legal and administrative framework for the development of prorate organizations, including cooperatives, which in turn strengthen democracy. The existing ILO standard does not take account of these developments.
In 1995 the Centennial Congress of the International Co-operative Alliance, the highest organization of the international cooperative movement, adopted a Statement on the Co-operative Identity, including a revised set of principles. These principles are: voluntary and open membership; democratic member control; member economic participation; autonomy and independence; education, training and information; cooperation among cooperatives; and concern for community. The new principles, while building on and refining the previously accepted principles, firmly positioned cooperatives as jointly owned, democratically controlled enterprises based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. The existing ILO standard, while sharing the same fundamental philosophical tenets, overemphasizes the role of government in cooperative development and weakens the autonomous character of cooperative identity and entrepreneurship. Furthermore, Recommendation No. 127 underemphasizes the business orientation of cooperative enterprises.
ILO´s Role in cooperative development
The ILO recognizes the importance of cooperatives in article 12 of its Constitution, which provides for consultation with cooperators - besides employers and workers - through their recognized international organizations. At the Third Session of the Governing Body in March 1920 a cooperative technical service was set up as part of the organization of the ILO. Thus the cooperative service is one of the oldest and most firmly established in the ILO. In accordance with these provisions the ILO has promoted the development of cooperatives, mainly through technical assistance and information, and has advised governments, and workers´ and employers´ organizations, on their role in this area. Today, the ILO has the largest programme of technical cooperation within the United Nations system for this purpose.
The report
The report is divided into three chapters and includes a questionnaire.
Chapter I analyses the changing environment of cooperatives in developing transition and industrialized countries and identifies the main changes that have taken place in the demographic, economic, social, political, ecological and technological fields and their impact on cooperative enterprises. This chapter also discusses the potential of cooperative in relation to the economic and social services they provide. The broader role of cooperative in decentralization, democratisation, and economic and social empowerment of women are also described.
Chapter II focuses on the prerequisites of success in the promotion of cooperatives based on the positive and negative experiences since Recommendation No. 127 was adopted. Specific emphasis is given to the changing role of government, cooperative policy and legislation, cooperative support services such as human resource development, management and consultancy and auditing, the role of the social partners, horizontal and vertical integration between cooperatives and, not least, the role of international cooperatives.
Chapter III contains some concluding remarks.
For more information, please refer to the ILO Coop Branch web page.
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Updated: 23 February 2001