According to the International Co-operative Alliance, a co-operative is “an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned enterprise”. What differentiates that enterprise from conventional organisations is therefore the way it is run on a daily basis.
Regardless of sector they operate in or where in the world they are based, co-operatives abide by seven principles that guarantee they are fairly and democratically run while maintaining business success. Seven co-operatives offer an example of what each of those principles mean to them.
Principle 1: Voluntary and Open Membership
Ohandje Artists Co-operative Ltd, Namibia
A co-operative is a voluntary organisation. That means every person or body that meets a co-operative’s membership criteria can join the enterprise; but this also implies no one can be forced to join such organisation.
Ohandje Artists Co-operative Ltd is an arts and craft co-operative formed in 2005 by 19 rural women. It now has over 2,000 members. They produce traditional baskets, clay pots, clothes and jewellery. The co-operative facilitates access to markets and sales points and skills development at grass root level.
“Membership is open”, explains Fredrika Luanda, Project Coordinator at Ohandje Artist Co-operative. “Everybody is welcome to become a member as long as she or he meets some requirements. You must be willing to join the organisation and you have to be a producer – you must be able to make baskets, you must be able to make original necklaces or any other activities in the co-operative; you must be willing to pay our fees, which is an entrance fee, you must be a shareholder in the co-operative, and you must be based in the original area we are working from – we don’t accept members from out of our region”.
Principle 2: Democratic member Control
According to the ICA, co-operatives are democratic organisations controlled by their members, who have a say in decision making. Angkasa, the apex organisation of the co-operative movement in Malaysia, is an example. It is a co-operative whose members are other co-operatives.
Angkasa’s spokeperson Shaharuddin Mohamed says Angkasa is democratic because its leaders – president and vice presidents – are elected by the members: “Every year there is an annual general meeting and the direction of the co-operative is determined by the members. We have proposals from the floor, proposals from the management of the co-operative; everybody votes and what is unanimously agreed or agreed by the majority of members is implemented by the co-operative”. The members also have the right to ask and question the board of directors: “It is very open. There is nothing to hide! Profits, annual accounts, the balance sheet… everything is on the table”.
Principle 3: Member Economic Participation
As well as having a say in how the enterprise is run, the members of a co-operative contribute to the capital of the organisation. Surplus generated by the activity of the co-operative can be used to further the growth of the co-operative and to deliver other projects – usually seeking social benefit – but also to pay members a dividend in proportion to their transactions with the organisation.
BECS is responsible for the management of Bageshwar District, in Uttarakhand (India), as a tourism destination. It was set up in 2011, as part of the Edge of India network of rural communities, with the support of the Scottish Government. Mahabir Bankoti, Uttarakhand Coordinator at Edge of India, assures that, thanks to this co-operative, “the whole tourism supply chain is managed and controlled locally by villagers in Karmi and Dhur – two villages in Bageshwar District, so that all the economic benefits accrue to the host community”.
Members of the co-operative provide services like homestays, guided walks and cookery courses. In order to join the co-operative, they pay an annual subscription of $2, but they also participate of the profits. Tourism triples the income of member households, but also offers a livelihood to unemployed young people that would otherwise leave and migrate to the cities.
Principle 4: Autonomy and Independence
Desjardins Group, Canada
“This principle derives from the very nature of co-operatives: men and women that give themselves a collective mean to respond to a particular need. Therefore, co-operative members shall always be given the assurance that their democratic organisation is under their sole control”, explains Serge Gagné, Chief Monitoring Officer at Desjardins Group.
This financial group, the largest in Canada with nearly 6 million members and clients, is a co-operative. It comprises a network of financial service co-operatives – mainly credit unions – that are autonomous and self-help organisations themselves.
For Desjardins Group, maintaining autonomy and independence meant, for instance, a battle conducted in the 20s and 30s by co-founders Alphonse and Dorimene Desjardins to counter the will of the Quebec provincial government to audit and inspect the caisses (credit unions). “As a result Desjardins set up and maintains nowadays its own auditing and inspecting service which reports to the Group’s Board of Directors as well as to the provincial regulatory body”.
Principle 5: Education, Training and Information
Lipson Community College supports its staff’s professional growth to maintain its high educational standards.
Through its School Improvement Groups, teachers research and try together new pedagogies. It is an example of how co-operatives provide training and education opportunities for their members. “It is commonplace for teachers to run training for other teachers – over half the staff have done this”, explain Steve Baker and Sarah Jones, Principal and Vice Principal at this co-operative school from Plymouth. By learning from each other, they have developed a sense of solidarity. “Outcomes from this practice include the number of post-graduate qualifications undertaken by the teachers and support staff. 40% now have M-level (master degree) qualifications, and two teachers are working towards D-level (doctoral degree)”.
But co-operatives do not just promote their members and employees’ professional development; they inform the general public about the nature and benefits of cooperation, through campaigns and events, and even the Internet and social media. When it comes to co-operative schools – the fastest growing part of the co-operative economy in the UK, co-operative principles and values, like self-help, equality and solidarity, are an intrinsic part of their curriculum.
Principle 6: Cooperation amongst Co-operatives
Ocepar System, Brazil
The 6th co-operative principle advises co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional, and international structures.
In Brazil, Cocepar Sytem shows how useful and powerful that cooperation amongst co-operatives can be. This organisation brings together three organizations from the region of Paraná, in Brazil: Ocepar, which represents co-operatives in this area of the country; Sescoop/PR, an instrument of modernization and business improvement of co-operative societies; and Fecoopar, the trade union for co-operatives. President of Ocepar System Joao Paulo Koslovski says: “In order to promote collective development of their members, Paraná State’s co-operatives join forces to add value to production through integrated industrial and logistical projects. Co-operatives of different sectors also work together to offer complementary services to associates”. At the moment, Ocepar System has 240 members that account for 13% of Paraná’s total wealth.
Principle 7: Concern for Community
The last principle on the list reminds this type of enterprises work for their members’ interest but also for the benefit of wider community.
The Energy Saving Co-operative installs energy saving improvements for its members, such as insulation, efficient heating systems, and renewable energy generation. Its purpose is “to provide people with the power to saving energy – to reduce both the UK’s contribution to climate change, and our buildings’ demands for energy production”, says Chief Executive Ewan Jones. “The best way to achieve this is via co-operative solutions, where the benefits of saving energy stay within local communities, rather than funding the external shareholders of energy producers and big banks”.
In addition, this co-operative works with local tradespeople and source fair ethical finance for those who need it: “The Energy Saving Co-operative combines the ‘Best of Big’ (e.g. expertise and efficient systems) with the ‘Best of Local’ (e.g. local knowledge of communities and buildings). We install via trusted local tradespeople, and reward community groups fairly for finding us new customers – to maximise local economic benefits and genuine sustainability”.
Original text published on http://www.wavemagazine.net