The revival of the co-operative idea:

ILO Co-operatives Recommendation one year on

This article by Andrew Bibby, in a slightly different form, was first published in the World of Work magazine, 2003

Five million litres of milk makes a lot of butter and cheese, but that's the quantity which the milk marketing cooperative behind the well-known Amul and Dhara brands in India deals with each day. This $500m Gujarat-based business brings together twelve district-based milk manufacturing cooperatives, which in turn allow farmers in over 10,000 villages in Gujarat to benefit by processing and marketing their milk on a shared basis.

The cooperative structure of the business is central to its success, a point underlined by the parent coop's Chairman Dr V Kurien. "We are proud to be workers in a cooperative movement that allows no distinction of nationality, religion, caste or community," he told his audience at the firm's AGM last year [2002]. Cooperation had helped bring 'unparalleled improvement' in the lives of rural farmers, he said, whilst also helping urban populations to have access to good quality unadulterated food.

Half a world away, the small team of graphic designers based on England's south coast who collectively make up the design company Wave have a very different work experience from Gujarati farmers but a remarkably similar message to make. Wave proudly boasts its credentials as a worker-owned cooperative, helping to create jobs and retain profits in the local community. "We believe in committing ourselves to the well being of the people who work in our cooperative, the people with whom we trade, our local community and society at large," the business tells its clients.

In total - taking into account not only agricultural cooperatives and worker-run coops but also the large numbers of financial coops, housing coops, retailing coops and other cooperatively run enterprises - as many as 100 million people worldwide earn their living the cooperative way. Iain Macdonald, director-general of the Geneva-based International Cooperative Alliance, is ready with statistics to demonstrate the importance of the sector: in Burkina Faso, coops control 77% of cotton production, he says. In Malta, coops have a 90% share of the fisheries industry. In the United States, two in every five people are members of coops.

For Iain Macdonald, cooperative business is an alternative to what he calls the 'unfettered free market economy'. "A lot of people are against the worst features of big business. People are pretty fed up with Enron-type practices," he claims.

June 2003 marks the first anniversary of the ILO's own initiative to encourage the idea of cooperative business. ILO Recommendation 193, for the Promotion of Cooperatives, was formally adopted last year [2002] at the International Labour Conference on 3rd June and in the months since then staff in the ILO's COOP team have been working with governments and coop bodies to help translate the Recommendation into practice at national level. Already there have been some results to report. In South Africa, for instance, the ILO has been able to help in the development of a cooperative development strategy. A new cooperative law is making its way on to the statute book, a move which should provide the basis for a welcome boost in coop development in the country. Guinea-Bissau has also seen the formulation of a National Policy on coop development based on the ILO Recommendation, and similar initiatives are underway in Ethiopia, Zambia and Zimbabwe. The Latin American cooperative movements have organised ten national seminars to familiarise their members with the new instrument.

The Recommendation has also been used in Russia, where the Russian parliament the Duma discussed rural cooperative development last December [2002], and in China, where a conference of the All China Federation of Supply and Marketing Cooperatives used the text when debating the conceptual basis for the country's future cooperative legislation.

Jürgen Schwettmann, chief of the ILO's COOP branch, talks of a rediscovery of coops as a tool to help poverty reduction, in the broader context of the globalisation of the world economy. He sees a number of ways in which coop development can help contribute to the ILO's Decent Work initiative. Firstly, he says, coops can help create jobs, particularly in economic sectors or geographical regions where conventional companies would struggle to create sufficient shareholder value to be able to operate profitably. As he points out, there are also many examples where cooperatives have managed to save existing jobs, as where workers in ailing companies have joined together collectively to save their businesses.

Cooperatives can also be the only channel through which poorer citizens are able to gain access to basic social services. Coops providing health services, childcare and preschool provision, care for the elderly and community services of other kinds are widespread, including in developed countries. "Coops may indeed provide the ideal, alternative delivery mechanism for user-controlled, democratically managed and locally rooted social services," he says.

Thirdly, Jürgen Schwettmann points out that coops can be a bridge to help people currently working entirely in the informal economy connect with the formal work sector. "Workers and entrepreneurs operating in the informal economy have no voice and very little bargaining power. The simple fact of organising these people into cooperative type organisations greatly increases their ability to participate in decision-making processes and to better negotiate conditions and prices with clients," he says.

Internationally, cooperatives identify themselves by reference to seven core values (see below), adopted by the ICA's General Assembly in 1995. These stress the democratic nature of coops, including the principle of open membership, irrespective of gender, race, political views, religion or social status. Coops also define themselves as autonomous self-help organisations, controlled by their membership.

This last point has not always been adequately understood by governments, who have sometimes embraced the theory of cooperation as a route for economic development but have then tried to turn coops into instruments of state. The Recommendation takes care to clarify this point, and to stress the participatory nature of cooperation. As Juan Somavia, ILO's Director-General, put in at the International Labour Conference last year [2002], "Cooperatves empower people by enabling even the poorest segments of the population to participate in economic progress; they create job opportunities for those who have skills but little or no capital; and they provide protection by organising mutual help in communities."

The International Cooperative Alliance, which is itself entering a time of regeneration, sees the ILO Recommendation as a valuable tool in its work. "It's the first time for a long time a formal official policy has been produced by an international organisation of the status of the ILO," Iain Macdonald says. His task now, he says, is to help disseminate the message: "The trick is to get governments to pay attention to it," he adds.

The seven cooperative principles

• Voluntary and open membership: cooperatives are voluntary organisations, open to members without discrimination
• Democratic member control: cooperatives are democratic organisations, controlled by their members who actively participate in setting the policies and making decisions.
• Member economic participation: members contribute equitably to, and democratically control, the capital of their cooperative
• Autonomy and independence: cooperatives are autonomous, self-help organisations controlled by their members
• Education, training and information: cooperatives provide education and training for members, elected representatives, managers and employees.
• Cooperation among cooperatives. Cooperatives serve their members most effectively and strengthen the cooperative movement by working together at local, national, regional and international level
• Concern for community: cooperatives work for the sustainable development of their communities

[Source: edited from the Statement on the Cooperative Identity, adopted by the ICA General assembly, 1995]

The text of ILO Recommendation 193 can be found on the ILO's website, www.ilo.org

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