News Release:
Better Laws for Co-Ops Mean Better Lives for People Around the World
October 31, 2006, Washington, DC – With a set of nine core principles set forth in a new report, cooperative movements around the world now have a valuable tool to evaluate and reform counterproductive cooperative laws and regulations. The report, entitled Enabling Cooperative Development: Principles for Legal Reform, was commissioned by the eight member organizations of the Overseas Cooperative Development Council (OCDC) and results from an intense year-long collaboration dubbed the Cooperative Law and Regulation Initiative – CLARITY for short.
Cooperatives – businesses owned and democratically controlled by their members – serve some 800 million people in every part of the world. In many countries, co-ops are recognized as public sector institutions, rather than private sector enterprises. The laws that govern them are often overly prescriptive and fail to address critical factors for safety and growth of cooperatives.
In Ghana, for example, co-ops were subjected to a six-month probationary period during formation, which could stretch into years. A Zambian law granted the government registrar of cooperatives the power to appoint special officers to manage the affairs of co-ops. And in Nicaragua, people must attend forty hours of training just to become co-op members.
"The new consensus [by cooperative development organizations]," reads the report, "emphasizes autonomy from governments and the removal of barriers to cooperative enterprise in all sectors of the economy." The report stresses the importance of involvement from local cooperative movements to promote context-specific approaches to legal reform rather than a blind adoption of model laws.
The nine CLARITY core principles for consideration by local movements in analyzing their situations, developing laws or advocating for legislative reform are:
- Provide effective and coherent regulatory framework
- Protect democratic member control
- Protect autonomy and independence
- Respect voluntary membership
- Require member economic participation
- Promote equitable treatment
- Promote access to markets
- Protect due process
- Avoid conflicts of interest
Each of the participating cooperative development organizations accessed funding from grants awarded by the U.S. Agency for International Development's Cooperative Development Program.
"Cooperation among cooperatives is a key principle of the international cooperative movement," said Judith Hermanson, senior vice president for CHF International and OCDC chairperson. "The CLARITY initiative has been a fruitful and rewarding way for us to share our collective experiences as development practitioners working with a wide variety of types of cooperatives."
The involvement of U.S. cooperative organizations in overseas activities grew out of the conviction that cooperative techniques, which have helped millions of American families, could be adapted to help poor and low-income people in developing countries achieve a better way of life. OCDC members have been development partners of the U.S. government for fifty years.
OCDC member organizations participating in the project were ACDI/VOCA, Americas Association of Cooperative and Mutual Insurance Societies, CHF International, Land O'Lakes International Development, National Cooperative Business Association, National Rural Electric Cooperative Association International, National Telecommunications Cooperative Association and the World Council of Credit Unions.
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