GeneralREVIEW Assembly Edition

REVIEW OF INTERNATIONAL CO-OPERATION

VOLUME 98 N° 2/2005

VOLUME 96 Nº 2 2003 Visit the ICA Web site at: www.ica.coop

for informaton on the International Co-operative Alliance and details of its rules, structure, activities and sectoral organisations.

Data is also available on the history and current information about the international movement, co-operative publications and co-operative issues. Additionally, there are links to websites worldwide in all sectors of the economy, sites on international organisations and business information of interest to co-operatives.

Opinions expressed in this publication are not necessarily those of the leadership and management of the ICA.

Contents may be reprinted without permission, but citation of source is requested and three copies of the publication concerned should be sent to ICA Review, 15, route des Morillons, 1218 Grand-Saconnex, Geneva, Switzerland. Review of International Co-operation Vol. 98 No 2/2005

Editor: Garry Cronan

Contents

Introduction: Iain Macdonald ...... 3

Invitation: Carlos Palacino ...... 5

Report on ICA Activities 2003-2005...... 6

General Assembly

Agenda ...... 11

Schedule of Meetings ...... 13

Highlights of General Assembly ...... 15

Draft Minutes of ICA General Assembly, Oslo, Norway, 4 September 2003 ...... 18

Information on Candidates for Election to ICA Board and Audit and Control Committee at the General Assembly ...... 27

Rochdale Pioneers Award ...... 35

Resolution for consideration by the General Assembly ...... 36

Foreword to Background Paper, Dr Ian MacPherson...... 43

Background Paper: Co-operative Principles Ten Years On, Dr Johnston Birchall ...... 45

Overview of the Colombian Co-operative Movement ...... 64

1

Introduction

It does not seem like two years since the last General Assembly in Oslo in September 2003. That Assembly was seen as something of a landmark endorsing as it did the findings of the Task Force which had been set up by the previous General Assembly in Seoul. Those findings have quietly but firmly imposed themselves on every aspect of ICA and much of what will be discussed at our forthcoming Gen- eral Assembly in Cartagena is influ- enced by that process. Iain Macdonald So this edition of the Review is in effect President of ICA global and President a glorified agenda for what promises of our Americas region. As Chair of the to be a very exciting week of co-opera- Assembly organising committee, I tive activity in Cartagena, Colombia. know we are in good hands! For our Colombian hosts this is a unique occasion. It is the first time that Dr Johnston Birchall has been asked to our Assembly has been held in South prepare the background paper - Co- operative Principles Ten Years On. America and puts firmly in the fore- I know this will help to galvanise debate front, the tremendous work being during the week and it seems timely to done by South American co-operators. look at what has happened in the 10 This fascinating continent has a very years since Dr Ian MacPherson pre- strong movement with a huge variety sented his reworked Values and Prin- of co-operative enterprises. And from ciples. Co-operation relies on constant a Colombian point of view the review evaluation, reinvention and promotion gives a very clear and in-depth account to stay at the forefront of social and of the socio-economic position of this economic debate and, looking at what country, as well as specific detail of the has happened over those last 10 years, Colombian co-operative sector. Of this has certainly been the case. course Saludcoop as one of the coun- try's main health providers is also the The theme of this year’s General country's second biggest employer. Its Assembly is Co-operative Values: A President, Carlos Palacino is also Vice Competitive Asset in a Globalised Econ- 3 omy. With the provision of some 100 As a co-operative organisation, demo- million jobs it is clear to me that the co- cratic elections are an essential feature operative movement more than holds of our governance and this year is no its own in the world economy. How- exception. Every four years we elect ever this is not necessarily recognised our President, Board and Audit and by international organisations and Control committee. I am pleased to governments, or indeed by the interna- say that we have a very healthy num- tional business community itself. ber of nominations for these positions. Building on Dr Birchall's paper there- Elsewhere in this Review you will find fore, our Assembly is geared to show- essential details on the candidates and ing that not only is co-operative enter- how to exercise your votes. Please prise a competitive form of business, it ensure that you do this. The actual is especially well suited to working in election itself will take place during the global environment. Our unique the Assembly on Friday, September 23 blend of social and economic factors is and although we have an exciting pro- to many the solution which answers gramme during our opening sessions many of today's problems. The busi- the day before, our statutory business, ness session on global solidarity for including the elections, will be a very instance will show how our Global important guide to our work over the Campaign against Poverty - Co-operat- next two years. ing Out Of Poverty is making a real dif- ference. In contrast, our session on A This year also sees a record number of Level Playing Field for Co-operatives in nominations for the Rochdale Pioneers Competition will discuss how we can award. Instituted in Seoul at our 2001 compete successfully in any business General Assembly, this award recog- environment. nises the achievements of co-operators During the week there will be a variety throughout the world. This year's of different events. Most of our sectoral selection committee and the Board face organisations and thematic committees a very difficult task to choose between have meetings and seminars. The the nominees listed here. A decision CICOPA World Conference will take will have to be made although it is an place as well as a session describing the achievement in itself to be nominated. new Co-operative Learning Centre. An Congratulations to all! examination of the benefits of micro- Whatever your interests there is bound finance, particularly for women, will be to be something which will appeal to discussed; especially remembering that you during our week in Cartagena. this year’s Co-operative Day message was Micro Finance Is Our Business! And Please enjoy! of course there is a two-day youth con- ference – now a major feature every two years and building on the success of the Iain Macdonald global youth network. Director General

4 Invitation from Colombia, the host for the International Co-operative Alliance’s 2005 General Assembly

A country with faith in the co-operative movement

Carlos Palacino Antía President of ICA Americas Colombian Confederation of Cooperatives Chairman – Confecoop

From the 17th to the 24th of September 2005, the International Co-operative Alliance, ICA, will be celebrating its General Assembly in Cartagena de Indias, Colombia. This occasion repre- ings and to promote the presence of an sents a huge responsibility but also a important group of leaders and deci- great opportunity for Colombia and its sion-makers in the ICA’s Global co-operative movement to demon- Assembly, we’ve prepared informa- strate to the world the natural wonders tion, see page 64, that contains not only of our land, the humane quality of our general information on Colombia, but people and to present a favourable also some revealing aspects of the co- image of a striving country in perma- operative sector and its importance to nent development and the economic social and economic development. and social advances gained by the Colombian co-operative movement, We hope that many of you will decide whose traditions, judicial develop- to join us in Cartagena to debate the ment and entrepreneurial progress various topics of interest to the co- operative movement, and also to expe- make it stand out within the Latin rience our reality first-hand and to American context. witness everything the Colombian co- In order to better acquaint the co-oper- operative movement does to improve ative world with our country, its cul- the standards of living of millions of ture and its socio-economic surround- Colombians. 5 Report on ICA Activities 2003 - 2005

Task Force looking at how to resolve this prob- lem without threatening our income The main thread running right base. through the work of the ICA over the last two years has been that of the task • An independent governance group force. Set up by the 2001 Seoul General has been set up to recommend Assembly, its impact has been quite considerable although many of its changes resulting from all these aspirations have still to be achieved. issues identified by the task force. Regionalisation, membership and gov- An interim report will be made to ernance could be said to be the main the 2005 General Assembly and its issues identified by the Task Force and work will continue after that as well. in each case there have been changes International standing made. Much of ICA's work is aimed at raising • everything the Task Force said was the profile of international co-opera- qualified by its most fundamental tion to our links with international point, that ICA was a global entity of organisations and governments. Dur- which its regions were an important ing this period considerable progress part. Regionalisation however, and has been made, particularly through: decentralisation which it implies, continue to be developed with spe- cific powers now part of each region's constitution

• membership of the last two years has varied both in numbers and amount of subscription. Although a degree of stability has been recognised, there is still concern regarding the lack of ICA President Ivano Barberini and ILO Director- attention given to the agreed criteria General Juan Somavia celebrating the achievements for payment. A working group is of the MOU 6 • The Committee for the Promotion • Similar discussions have been held and Advancement of Co-operatives with UN Habitat which will lead to a (COPAC). ICA provides coordina- stronger relationship with ICA tion for COPAC which allows us Housing. considerable access to the higher Further work has been carried out echelons of the UN and its agencies. with the World Bank, UN Aids and of Recently COPAC has expanded its course we continue to provide support membership and worked closely for International Co-operatives’ Day. with ICA in the field of co-operative development, particularly in react- Regional offices ing to the tsunami disaster. Regional offices have been very active during this period having run very • In 2004 we signed a Memorandum of successful regional assemblies as well Understanding with the Interna- as a variety of different conferences, tional Labour Office. This has led to training sessions and political lobby- a dramatic increase in activity with ing. Each have established a new set of ILO. In particular we have estab- rules as designated by the last General lished a joint campaign against Assembly and this has helped with poverty showing how co-operative establishing their executives as consti- enterprise provides practical solu- tutional entities within ICA. They now tions in alleviating poverty. In addi- have agreed functions which help with tion strong links have been estab- the decentralisation process. In partic- lished with the Youth Employment ular ICA Europe now has offices in Network and it is hoped to develop a Brussels rather than Geneva. This is project on conflict resolution show- particularly important at a time when the EU is expanding and co-operative ing again the potential benefits of co- influence is needed at its centre. They operative enterprise. have currently established an operat- ing platform called Co-operatives In • We also have a Memorandum of Europe which is geared to this end. Understanding with the Food and Agricultural Organisation. Having Dotcoop spent much of the last two years try- From a very inauspicious beginning ing to persuade them not to cut back .coop has emerged over the last two on their co-operative commitments, years to become a genuinely strong we have now agreed to second a identity for the international coopera- member of staff to their operation. tive movement. The recent purchase This has been done with the co-oper- by Oxford, Swindon and Gloucester ation of NACF in Korea who will Co-operative Society of the registra- provide an appropriate person. This tion business has ensured that this ini- will also ensure that agricultural co- tiative is now safeguarded for the operatives will continue to feature movement itself. Talks are now under prominently in the affairs of FAO. way to allow the regional offices of the 7 ICA to become registrars and resellers involved with clearly defined roles. in their own right. An example of good practice in this Development area includes: The nature of our development work has been evolving over the last two • Campaign against Poverty. Announced years. In working closely with our in Oslo this joint campaign with ILO regional colleagues and our develop- has recently linked up with The ment partners, we are developing poli- Global Call to Action against Poverty, cies which more properly reflect the indeed ICA is represented on the nature of our movement and our global steering committee. ICA resources. This means more integra- brings a much-needed practical pur- tion with our partners and providing pose to the campaign showing how services from the regions to those part- co-operative based businesses will ners which complement each other. bring not only self-help, self-respon- We have seen the emergence of the UK sibility and solidarity, but the much movement as a new partner in devel- vaunted democracy. Only co-opera- opment particularly with the Co-oper- tives advocate democracy in business ative College and its work with DFID. without which challenges the vicious The aim is to have properly planned circle and downward spiral of development programmes in which all poverty, partly caused by the empha- partners, regions and the ICA are sis on capitalist business. Communications There has perhaps been more advance in this area than in any other. Two years ago there was little in the way of communication with our members, but all this has changed with the appointment of our communications manager and the introduction of the Weekly Digest. Now produced in six languages this has been an undoubted success and much overdue. The chal- lenge is now to build on this. Having improved internal communications in this way, the next step is for improved external communication. To this end a number of initiatives are under way and planned:

• a global co-operative business review on a quarterly basis 8 global ICA and its regions. In the last two years, a workgroup has identified the way forward which has included an annual meeting with the ICA board itself. These issues will of course also be considered by the Governance Working Group. Thematic committees • Research, Gender Equality, Commu- nications and Human Resource Development have each in their own way carried out important work in the last two years. The Task Force clearly separated these committees from the sectors and head office, regions and sectors should consider thematic committees as part of their service provision. Indeed their con- stitutions should reflect this. At the moment each operates separately from one another and its con- • publication of the top 300 co-opera- stituents, and this will be part of tives their own reviews. • refurbished web site Youth • proactive Communications commit- A Global Youth Network has emerged tee over the last two years and a commit- ment was made at the Oslo assembly Sectors to extend its operation. As a result The Task Force identified work with young people are now represented on our sectors as being of crucial impor- the ICA Board and plans are under- tance. Work has been ongoing to way to extend this to the regions. improve the relationship between the Conclusion sectors themselves, the regions and head office. We are now in the process In the last two years I have visited over of establishing and reworking con- 24 countries. This represents an effort tracts with each, so that roles are by the ICA Secretariat to make more clearly understood and identified. serious contact with our members and One of the important objectives is to to respond to their wishes. Indeed our clarify services which are delivered by President in his ambassadorial role has the sectors to the movement as a visited considerably more countries whole, and how the sectors fit into the and I think this has been appreciated overall policies and programmes of in general and reflected in the more 9 stable position which ICA finds itself expertise and resources in reconstruct- in today. ing their co-operative movement. However visiting countries and mem- However to see the movement flour- bers cannot be an end in itself. There ishing in all corners of the world, both must be a result from such visits and rich and poor, and in those afflicted by formal action taken to ensure benefits poverty and conflict, is incredibly emerge. A balance must also be struck moving and convinces me of the between the benefits to be made and inevitability of our success. Our main the resources used to that end. job is to convince the outside world of The visits to the tsunami countries is this as well. an example of where I feel proper use was made of resources and time. It is hoped that those countries will indeed Iain Macdonald have benefited from an input of Director-General

10 ICA GENERAL ASSEMBLY

“Co-operative values: A competitive asset in a globalised economy” Hotel Hilton, Cartagena de Indias, 22-23 September 2005

Agenda

Thursday, 22 September 09:00-12:30 Opening • Mayor of Cartagena • Carlos PALACINO, President of the Colombian Co-operative Confederation, ICA Vice-President for the Americas • President of the Congress, Colombia (invited) • José Antonio OCAMPO, Under-Secretary General for Economic and Social Affairs, United Nations • Sergio PÁEZ VERDUGO, President of Inter-Parliamentarian Union - IPU (invited) • Ivano BARBERINI, ICA President Keynote presentations • Ten Years On: Co-operative Principles Driving Success • Johnston BIRCHALL, United Kingdom • Co-operatives: Competitive Business Models Alban D’AMOURS, President of Desjardins Group, Québec, Canada • Social Responsibility and Values Driving Mainstream Business Success • Co-operatives Making Fair Globalisation a Reality José Manuel SALAZAR-XIRINACHS, ILO Executive Director 12:30-14:00 Lunch break

11 14:00-18:00 Business fora (parallel sessions) 14:00-16:00 • Best Practice of Successful Co-operative Business • A Level Playing Field for Co-operatives in Competition 16:00-18:00 Global Solidarity: Co-operating out of Poverty • Co-operative Innovation: A Sectoral Perspective Friday, 23 September 09:00-12:00 General Assembly Statutory Business • Approval of the Agenda • Approval of the Minutes of the General Assembly, Oslo • Reports to the Membership from the • Audit & Control Committee • President • Director-General • Independent Auditor • Election of ICA President, Board members and Audit & Control Committee members: introduction of candidates and voting 12:00-14.00 Lunch break 14:00-17:00 General Assembly Statutory Business (cont’d) • Election results • Report from the Governance Working Group • Motions and Resolutions • Presentation of the Rochdale Pioneers Award • Invitation to the next General Assembly • Any other business • Closing of the GA Statutory Business 17:00-17:30 Closing Address by Alvaro URIBE, President of Colombia 17:30-18:00 Meeting of the newly elected Board 19:00-22:00 Farewell Dinner

12 ICA GENERAL ASSEMBLY AND RELATED MEETINGS Hotel Hilton, Cartagena de Indias, 17-23 September 2005 Schedule of events

Saturday 09:00-18:00 Regional Directors' meeting 17 Sept

Sunday 09:00-10:30 Global HRD Executive Committee meeting 18 Sept 11:00-18:00 CLC planning workshop (Global HRD meeting) 09:00-18:00 Youth Conference 09:00-18:00 ICA Housing meetings 11:00-12:00 Gender Equality Executive meeting 14:00-18:00 Gender Equality Plenary meeting 15;00-18:00 Audit & Control Committee 14:00-18:00 ICACC meeting 14:00-18:00 CICOPA Executive and General Meeting Monday 15:00-17:30 Development Committee 19 Sept 09:00-12:00 CLC planning workshop (Global HRD Committee) 09:00-18:00 Youth Conference 09:00-18:00 CICOPA World Conference 09:00-18:00 IHCO meetings 09:00-13:00 Governance working group 09:00-12:00 President’s Committee 12:00-14:00 DotCoop Board meeting 14:00-18:00 ICA Board meeting 14:00-18:00 ICBA Executive meeting Tuesday 09:00-12:00 CCI Workshop and General Meeting 20 Sept 09:00-12:00 ICBA Seminar 09:00-12:00 ICAO meetings 09:00-12:00 IHCO Europe 09:00-12:00 TICA meeting 09:30-13:30 ICFO meeting (incl. lunch) 09:00-12:00 ICA Board meeting

13 14:00-18:00 ICA Board & Sectoral Organisations' chairs meeting 18:00-19:00 New members’ reception Wednesday 09:00-12:30 The CLC: a new portal to co-operative knowledge 21 Sept and training 09:00-12:30 Micro-finance is OUR business 09:00-18:00 Free trade: a challenge for co-op enterprises and their integration in the Americas 14:00-16:00 Top global 300 co-operatives 14:00:18:00 Co-operative integration of agricultural marketing 15:00-19:00 Standing Committee of Asia/Pacific 19:00 Welcome Reception Thursday 09:00-12:30 General Assembly Opening and Keynote 22 Sept Presentations 14:00-18:00 Business Fora 18:00-19:30 .Coop Celebration - The First Four Years! Friday 09:00-17:00 General Assembly Statutory Business 23 Sept 17:00-17:30 Address of Mr. Alvaro Uribe, President of Colombia 17:30-18:00 Meeting of the newly elected Board 19:00 Farewell Dinner

Meetings in blue: on invitation only Meetings in red: open to General Assembly registrants only Meetings in black: open at the chair's discretion

14 Highlights of General Assembly and other Cartagena Events

More than thirty events will take place Friday 23 September. It is promising in the week of the General Assembly. to be one of the largest and most inter- esting to date. It will of course be the The first few days of the week are first General Assembly to be held in taken up with meetings of our sectoral South America. organisations and thematic commit- tees. The ICA has nine global sectoral We have listed below some of the organisations, eight of which are meet- expected highlights of the week. ing or holding conferences in Carta- gena. A special youth conference is • CICOPA, the International Organi- also being held. During this time the sation of Industrial, Artisanal and ICA Board and various other internal Service Producers’ Co-operatives, is committees, including its Audit and holding its Sixth World Conference Control Committee, the Governance on 18 September on the theme of Working Party and the Development The Contribution of Worker and Arti- Committee will also be meeting. sanal Co-operatives to Local Develop- ment. The Conference will emphasise Wednesday 21 September has been set the need to acknowledge that co- aside for a series of special interest operative development and local seminars. Sessions are planned on top- development are interrelated. New ics as varied as microfinance, the new trends will be examined, such as the online co-operative education and management of social services by co- training portal, co-operatives and operatives and the transformation trade in the Americas, supply chain into co-operatives of industrial management for co-operatives, and a enterprises in crisis. The impact of briefing on the ICA’s new top 300 those phenomena on integrated local global co-operatives project. We are development, including sustainable sure there will be something of interest employment and social inclusion, for you from among this variety of top- will be analysed. It will make a ics. strong plea to implement the neces- The General Assembly itself will be sary financial means, training and held on Thursday 22 September and partnership. 15 • A special Global Youth Co-operative liminary estimates suggest that the Conference will be held on 17-19 largest 300 co-operatives are a very September. A large number of youth real and significant global presence. participants are expected to attend. The aggregate turnover is much A full programme has been devel- larger than expected and they are oped by representatives from the leaders in many market segments ICA’s Youth Network. It is expected and countries. Over 26 countries are that many of the youth conference represented on the global list so far. participants will also attend the Gen- Many of the Global 300 have been eral Assembly as observers. competing and growing for at least fifty years, they are some of the old- • Microfinance is the focus of one of est and most competitive businesses the special interest seminars on in the world and they represent the Wednesday 21 September. This tip of the iceberg of co-operative seminar is being organised by the enterprise throughout the world. ICA Gender Equality Committee. It This project is designed to show the will highlight the experiences of co- world the importance of co-opera- operatives in the provision of micro- tives, by highlighting the size and finance with a focus also on women. economic significance of the largest It will present the variety of microfi- co-operatives. nance schemes around the world and show the impact of these • A series of keynote presentations schemes in improving the economic will be a feature of the first day of the and social well-being of women and General Assembly. A specially com- men around the world. A keynote missioned background paper Co- speaker from the Secretariat of the operative Principles – Ten Years On UN International Year on Microcre- will be presented. Other invited dit has been invited to open the ses- speakers in this important session of sion and provide an overview of the the General Assembly will focus on scope and impact of microfinance. A how co-operative values are driving series of co-operators will then share business success. Co-operatives are their experiences in microfinance. not along in putting values at the Speakers from Asia, Africa, Europe centre of their business model – and the Americas will provide infor- mainstream business is increasingly mation on microcredit schemes embracing such approaches through the popularity of Corporate Social operating in their regions. The event Responsibility. What does this mean is open to all participants of the ICA for co-operatives? This is the focus of General Assembly. the third keynote presentation. • Another of the special interest semi- Finally the role of co-operatives in nars will be on the ICA’s Global 300 helping to create a fairer globalisa- project. It is proposed to release the tion will be the topic of the last of the first ever ranking of the top co-oper- keynote speakers. These presenta- ative businesses in the world. Pre- tions will set the stage for the 16 detailed business sessions of the o Global Solidarity: Co-operating Out Assembly which follow. of Poverty. The vast potential of co-operatives in contributing to • The business sessions of the assem- reducing poverty can only be bly are designed to explore in detail effectively exploited if we succeed topics of interest to members. This in harnessing the financial and eth- year there are four sessions. They ical strength of the world co-opera- are: tive movement. The tsunami expe- o Best Practice of Successful Co-opera- rience and the overwhelming tive Business This session will build response from the co-operative and expand on the keynote presen- world to the ICA’s appeal to help tations and include presentations the stricken members and societies from four CEOs of the top 300 rebuild their lives, has shown the global co-operatives. They will potential of co-operatives to allevi- outline in very practical terms why ate suffering. This session on their co-operative is succeeding. Global Solidarity: Co-operating Several of these co-operatives are out of Poverty, will give us an opportunity to learn about the delivering year on year growth – tragedy and what has happened they are succeeding and doing since that fateful day from co-oper- something right! ators in Indonesia and Sri Lanka. o A Level Playing Field for Co-opera- o Co-operative Innovation: A Sectoral tives in Competition Co-operatives Perspective This session will fea- are often disadvantaged when ture outstanding examples of governments and international innovation from several different institutions develop legal and reg- industry sectors, including rural ulatory frameworks. This session electricity co-operatives in South will examine amongst other issues America, the exciting new phone International Accounting Stan- co-op from the UK and a remark- dards, the World Trade Organisa- able worker co-operative. Taken tion attitude to co-operatives, Mer- together they provide important cosur-EU activities in relation to lessons on why some co-opera- co-operatives and more general tives are able to embrace an inno- trends and issues associated with vative culture and compete suc- legislation and lobbying. cessfully against often larger for profit companies.

17 INTERNATIONAL CO-OPERATIVE ALLIANCE General Assembly – Oslo – 4 September 2003

Draft Minutes There being no proposed changes the General Assembly approved the 1. Opening agenda by acclamation.

The ICA President, Mr. Ivano Bar- 3. Draft Minutes of the General berini wished all a warm welcome to Assembly in Seoul 2001 the General Assembly 2003 and called The draft minutes were approved by the General Assembly to order. acclamation. Before turning to the business at hand, 4. Report of the ICA President the President asked the Assembly to The President reported on his activities stand and observe a minute of silence over the last year. in recognition of the following co- operators who had passed away: Mr. 5. Report of the Director-General Masao Ohya, Mr. Erlender Einarsson, The Director-General reported that it Yashitada Nakaoka, Mr. Alexandr had been a productive year and that Krasheninnikov. staff deserved credit as they had The ICA President announced that this responded to the past problems in the Assembly was well attended with a best way – with a strong resolve and total of 609 made up of 238 Represen- commitment. tatives, 14.7% of which being women; His dealings with the President and 273 observers, with 12.8% women; 40 the Board has also been positive and guests, 10 members of the press and 28 productive. The Board clearly wanted personal interpreters and 20 staff to promote the principles and values of members. global cooperation rather than dwell endlessly on financial problems. The 2. Adoption of the Agenda DG said that the President was very The President reminded the Assembly able and that he was determined to see that the draft Agenda had been circu- the world co-operative movement rec- lated to members as part of the Review ognized for the great philosophy and of International Co-operation. business enterprise which it is. 18 The Seoul General Assembly decided out as well as an excellent Regional to set up a Task Force to undertake a Conference in Mauritius which was his root and branch review of ICA. Its first official function as ICA Director- members were, Ivano Barberini, General. Paulne Green, Ousseynou Dieng, Glen In the Americas work also continued Tully and Yehudah Paz. It met several with development partners and initia- times and its recommendations were tives were taken in regard to credit and reported to the Board earlier in the savings cooperatives, forestry and year. The Restructuring Report would gender. show the end result of this, presented by Pauline Green. The Director-General reported that he had attended the Regional Conference The Director General went on to report in Ascunsion, Paraguay which was a that Recommendation 193 had been success and his first visit to South adopted. This called on all Govern- America. ments to actively promote cooperative enterprise. He said that Recommenda- In Asia and the Pacific a very success- tion 193 had become a clarion call for ful Ministerial Conference was held in co-operators all over the world and Nepal attended by our President and was an extremely important milestone Jan Eirik Imbsen and during the year, in cooperative history – not least in and many events had been held with persuading governments of the need farmers, researchers, and bankers for good co-operative legislation and amongst others. good co-operative governance. Reporting on the European region, Lis- Reporting on the progress of dotCoop, bon in October showed what great he said that cooperative organizations support we have throughout their are recognizing its importance as country and also emphasizes that emphasis of their special identity as a coops are not just for poor people. A cooperative enterprise. He encouraged lot of work was done in 2002 helping those member organizations who were coops in Central and Eastern Europe not yet using .coop to do so and re-establishing their positions. Several encourage their members also. meetings took place with the European Union and an excellent housing con- Reporting on the Regions, the Direc- ference held in Turkey. tor-General said that 2002 was used to The DG ended his report on a positive consolidate and build. note saying that Regions and Head In Africa we recognized that we must Office function with the minimum of work with the UN and others in tack- resources, however a lot is being done ling the resurge of HIV/Aids and look and that he could commend that co- beyond that to better times. Successful operation is on the move. He reported events and training programmes on that co-operatives provided 100 mil- agriculture, gender and human lion jobs throughout the world – resource development were carried much more than all multi-national 19 corporations put together. In all this on time and be paid in accordance travels he has encountered tremen- with the formula. For ICA, the base for dous enthusiasm for the philosophy a sound economy is the membership of cooperation and its influence in fee. She went on to say that financial business enterprise. He stated that we stability is especially important today must use that for our advantage as when the co-operative movement can well as for the people we represent. and must play an important role in all kinds of societies, not least the devel- The Director-General presented his oping ones. report on the activities of the ICA based on the Annual Reports for 2001 Finally, Mrs. Mårtensson, on behalf of and 2002 which had been distributed. the Audit & Control Committee, sub- mitted the recommendation to the 6. Report of the Independent General Assembly to approve the Auditor audited accounts for the years 2001 The Auditor in charge of Ernst & and 2002. Young, Mr. Mark Hawkins com- The General Assembly approved the mented upon the financial statements ICA annual accounts for the years 2001 for the years 2001 and 2002. The con- and 2002 and the report of the Audit solidated statements for the two years and Control Committee. present fairly, in all material respects, the financial position of the Interna- 8. Elections (Board and Audit & tional Co-operative Alliance as of Control Committee) December 31, 2002 and the results of The President said that two additional its operations and its cash flows for the nominations had been received for the year then ended in accordance with Board. These nominations had been International Accounting Standards. reviewed by the Elections Committee 7. Report of the Audit & Control and had been added to the ballot sheet. Committee He also announced to the Assembly that in the case that Gun-Britt Martens- The Chairman of the Audit & Control son and Pal Bartus were elected to the Committee, Mrs. Gun-Britt Mårtens- Board they would stand down from son, commented upon the way the the Audit & Control Committee. The Audit & Control Committee had candidates for both the Board and worked. She said that the financial Audit & Control Committee presented affairs had improved since the General themselves briefly, after which the Assembly in Seoul and it was a good Director-General explained the voting that ICA had been able to start rebuild- procedure as proposed and agreed by ing its reserves. She thanked the mem- the Elections Committee. bership, the new leadership at ICA Head office and the staff. For a good The President told the assembly that future, she said, we needed to have a the three Regional Assemblies had much better discipline among us, the elected their Vice-Presidents as fol- membership fees must be paid, be paid lows: Stanley Muchiri, the Vice-Presi- 20 dent elect for Africa, Carlos Palacino, elected by secret ballot, and the Audit the Vice-President elect for the Ameri- and Control Committee members by a cas, and Pauline Green Vice-President showing of the ballot papers as it was elect for Europe. not a contested election. Election results would be announced after the The candidates to the Board were lunch break after the count of the asked to come forward and introduce secret ballots which would be super- themselves. vised by Mr. Jakub Janiak of the Audit • Mr. Deepak Prakash BASKOTA, & Control Committee. National Co-operative Federation of The Assembly was then asked to ratify Nepal the elections of the 3 Vice-Presidents, • Mr. Pal BARTUS, National Federa- Stanly Muchiri as Vice-President for tion of Consumer Co-operatives and Africa, Carlos Palacino as Vice-Presi- Trade Association (Co-op Hungary) dent for the Americas, and Pauline Green as Vice-President of Europe. The • Mr. Ousseynou DIENG, National Assembly approved by acclamation. Co-operative Union of Senegal (UNCAS) The President then congratulated the three ICA Vice-Presidents. • Ms. Elsa Gun-Britt Mårtensson, HSB 9. Statement of the Youth Riksförbund, Sweden Conference • Mr. Isami MIYATA, Central Union Entitled “Through Co-operation, of Agricultural Co-operatives (JA Another World is Possible”, the state- Zenchu), Japan ment indicated that the co-operative The two candidates to the Audit and model can contribute to the eradication Control committee also presented of poverty. It was the responsibility of themselves large well-established Co-operatives to support the creation and growth of co- • Mr. Shugo OGURA, Japanese Con- operatives in developing countries. The sumer Co-operative Union (JCCU), Youth Conference asked delegates to Japan encourage the involvement of young • Mr. Roy Berg PEDERSEN, Federa- people in their organizations. tion of Co-operative Housing Asso- 10. Presentation of certificate to Jens ciations (NBBL), Norway Heiser The Director-General then explained In recognition of his 12 years on the the voting procedure; each member ICA Board, Jens Heiser from Germany organization had received the number was presented with a certificate by the of ballot papers based on the voting President. entitlement of each member organiza- 11. Report of Elections tion calculated according to the ICA Rules. The Elections Committee deci- The Director General reported that the ded that the Board members would be following were elected to the Board 21 and the Audit & Control Committee:- • Regional federations or unions of co- operative organizations Mr. Pal Bartus, National Federation of Consumer Co-operatives and Trade • Individual co-operative organiza- Association (Co-op Hungary) tions (of a multi regional nature) Mr. Ousseynou Dieng, National Co- • Educational, research and other operative Union of Senegal (UNCAS) institutions which promote co-oper- atives and are affiliated to the co- Ms. Elsa Gun-Britt Mårtensson, HSB operative movement Riksförbund, Sweden b) Associate – These are organizations Mr. Isami Miyata, Central Union Of which are supporters of co-operatives Agricultural Co-operatives (JA or are owned and controlled by co- Zenchu), Japan operatives. 12. Report and Recommendation of c) Sectoral – The sectoral organiza- the Board on ICA Restructuring tions are branches of ICA, and there- Pauline Green presented the Report fore all their members are affiliated to from the Board which was accepted by ICA as Sectoral members. Normally, acclamation. those Sectoral members who are eligi- ble will also be full members of ICA. 13. Rule Changes. These were presented by the Director General Members and Associate members shall pay an annual subscription in propor- Article 6 Eligibility tion to their economic activities or on There should be three types of member the basis of the aggregate business organizations of the ICA activity of their members. Associate members should pay on a reduced a) Members – These are the main types scale. of organizations in membership with full participatory powers. Normally Associate and Sectoral members do they are: not have voting rights in ICA’s global or Regional frameworks. • National unions or federations of co- operative organizations Article 8 Rights of Members a) Remove “at the meetings” • National confederations of co-opera- tive unions (Apex organizations) Article 11 Subscriptions Delete para e) • National co-operative business organizations with majority individ- Article 12 Authorities ual ownership Add “Regional Elected Bodies” after “Board” • International co-operative organiza- tions Insert new Article 17 “Powers of Regional Assemblies”after third para- Exceptionally, they may also be: graph on page 16: 22 d) Replace with “elect a President of d) To reinforce member active partici- the Region, who will also serve as ICA pation Vice President subject to ratification by e) To promote sustainable co-opera- the General Assembly, and elect a tive regional development Regional Governing Body” f) To strengthen and expand regional Article 19 Powers of the Board sectoral organizations and Thematic Add – (new clause) “(a) to develop and Committees and ensure their co- monitor a global strategy for ICA” operation with their global equiva- (Renumber other clauses) lent At end of i) “including Thematic Com- g) To enhance the image of ICA and mittees” the co-operative movement within Add new Article 20 “Regional Elected the Region, with national and Bodies”: regional institutions a) A Regional Elected Body shall con- h) To establish committees where sist of a President, Vice Presidents appropriate and other members elected by the i) To provide recommendations on Regional Assembly for a four-year membership applications from its term. Vacancies shall be filled Region to the ICA Board through election at a subsequent Regional Assembly or by co-option j) To implement and monitor activi- subject to ratification at a subse- ties and programmes financed by quent Regional Assembly. the Regions, sectoral organizations and ICA partners in collaboration b) The Regional Elected Body shall be with Head Office elected as decided by the Regional Assembly as long as it is within the k) To ensure regional finance and Rules of the ICA budgeting is strictly monitored and within the general guidelines of ICA Add new Article 21 Competencies of the Regional Elected Body: l) To approve the annual budget and work plan prepared by the Regional a) To work within the policy guide- Director before submitting to the lines and decisions laid down from Director-General and ICA Board for time to time by the ICA Board final approval b)To manage the affairs of the ICA at regional level between the meetings New Article 22 Thematic Committees of the Regional Asssembly Thematic Committees shall be based c) To prepare the agenda and organ- on functional or multi-purpose activi- ize the meetings of the Regional ties and shall receive support from the Assembly ICA, as mutually agreed. They will:

23 a) Draw up their rules, which shall be The ICA Board may establish or dis- approved by the ICA Board solve, and recognize or withdraw recognition from international Sectoral b) Report regularly on their activities Organisations in such areas of eco- to the ICA Board and General nomic and social activity of co-opera- Assembly tives as considered desirable. c) Have the right to propose to the ICA The Sectoral Organisations shall: Board themes for discussion a) Draw up their Rules, which shall be d) Establish a working collaboration approved by the ICA Board; with each other, where practicable and desirable b) Report regularly on their activities to the ICA Board and General e) Collaborate with the ICA Head Assembly; Office and Regional Offices, where practicable c) Be entitled to one representative at f) Ensure that their regional commit- the General Assembly, who shall tees are establishes, and operate, in have full voting rights; conformity with policies established d) Have the right to propose to the ICA by ICA and its Regional Assemblies, Board themes for discussion; with regional chairs represented on global committees e) Be responsible to their members and seek to establish a working collabo- g) Be entitled to one representative at ration with each other, where prac- General Assembly, with voting ticable and desirable; rights f) Collaborate with the ICA Head Article 26 Director-General Office and Regional Offices, where Add new b) “Coordinate, montitor, practicable; evaluate and support the work of the g) Ensure that their regional commit- Regional Offices” tees are established, and operate, in Article 27 Responsibilities of conformity with policies established Regional Offices by the ICA and its Regional Assem- blies, with regional chairs repre- • Delete first paragraph sented on global committees; • Add at end of d)….”and support h) Self-finance their activities elected bodies” Membership Application and Admis- • Delete penultimate paragraph sion Requirements

Section VI Sectoral Members Paragraph 7, delete and replace with: Article 28 Sectoral Organisations “Member organizations having diffi- Replace all after first paragraph with: culty in paying subscriptions can 24 apply for leniency to the Director- Remove “8. INTERCOOP” AND “10. General by 31 March each year as ICEO” follows: Replace “ICA Global Women’s Com- a) Members may be granted one year’s mittee” with “ICA Gender Equality postponement of subscription pay- Committee” ments provided that the outstand- The Rule changes were agreed and the ing debt is cleared. DG indicated that the new rule books b) No member should be entitled to would be published later in the year. more than one year’s postpone- 14. Resolution ment. If the above definition is not complied with, a final decision shall The ICA Board proposed a resolution rest with the Board following the important discussions on c) Organisatons once expelled from co-operative development which had the ICA for non-payment of sub- taken place during the Oslo Assembly. scriptions cannot re-apply for mem- The Resolution read as follows: bership within five years unless “The 2003 ICA General Assembly, their outstanding debts are cleared” AWARE of the changes, complexity Subscription Formula and challenges of the global environ- Delete 3 and 4 and replace with: ment in which co-operatives operate. “3. Minimum subscriptions estab- REAFFIRMS its continued support to lished by the General Assembly shall the RIO Co-operative Declaration and be 5,500 Swiss Francs the belief in the co-operative principles and the co-operative form of organiza- 4. Maximum subscription as estab- tion in solving the problems of poverty lished by the General Assembly shall and other social ills and in contribut- be 275,000 Swiss Francs” ing to the achievement of the UN’s Standing Order III Millennium Development Goals. Representation at General Assembly LOOKS FORWARD to working with the ILO in the implementation of the 1.and 2. Replace “5000” with “5,500” ILO Recommendation 193. APPRECIATES the relevance of the 8.Add “associate”, after “representa- theme of the General Assembly, Co- tive” operatives for economic, social and Standing Orders – Section VI. Spe- democratic development, which cialised Bodies underlines the role of co-operatives in development. Rename “ICA Specialised Organisa- tions” as “ICA Sectoral Organisations” COMMENDS the active and leading and “Thematic Committees” through- role of the ICA in promoting co-opera- out. tive development, and 25 WELCOMES the continued construc- had come to bring the General Assem- tive partnership with ICA’s develop- bly to a close. He, on the Assembly’s ment partners, and behalf expressed great appreciation to REMINDS members and partners of our hosts – Coop NKL, NBBL, the Nor- the important role of women and wegian Federation of Co-operative youth in all development activities and Housing Association and Norsk Land- the need to include a gender perspec- brukssamvirke, the Federation of Nor- tive when addressing co-operative wegian Agricultural Co-operatives for development, their tremendous efforts. The efficient arrangements enabled a successful ASKS members and partners to push meeting. The President thanked governments, international donor Steiner Dvergsdal and his organizing organizations and other development agencies to contribute more to co-oper- committee for their hard work. ative development. The President also thanked ICA staff CALLS ON its member organizations for their hard work in making the in the industrialized world to give event a success. Thanks went also to renewed attention to the way in which the interpreters who had facilitated the they can rally the support of their discussions and assisted during the members n promoting development in meeting. the developing world. The members were also thanked for DECLARES its resolve to actively coming to Norway in such large num- support ICA’s development pro- bers. The President stated that it was gramme and the campaign against only through their continued support poverty” that ICA could carry out its role – and The Assembly approved the resolution was thanks to them that ICA existed. by acclaim. The President ended the Assembly by saying that the future of co-operation 15. Venue of next meeting was in our hands and asked that we join The President then announced that an together to make the co-operative differ- invitation had been received from the ence to members, our communities, our Colombian Co-operative Movement to nations, our regions and the world. hold the next General Assembly in The President announced that the Cartagena, Colombia, and encouraged the Assembly to accept. A presentation Rochdale Awards would be presented by Carlos Palacino was then projected. at the Gala Dinner later that evening, outgoing Board members would be The Assembly then accepted the invi- recognized and an award would be tation unanimously. given for the best .coop website. 16. Closing Board members were asked to stay on The President then said that the time in the hall for a brief meeting. 26 ICA General Assembly 2005 Cartagena (Colombia) Information on Candidates for Election President – Board – Audit & Control Committee (Name of Candidate, Nominating Organisation, Country)

Candidate for ICA President the Executive Secretary of FECECAM BARBERINI Ivano, Legacoop, Conf- Benin which is a microfinance co- cooperative, AGCI, Italy; NCUI, operative institution in West Africa. He is a bank official and economist India and started working in a savings and Mr. Barberini was elected as ICA Presi- credit cooperative in 1994. This net- dent at the General Assembly in Seoul work now has 430,000 members and in 2001 and has over 40 years experi- has offices in the whole country. The ence in the co-operative movement. level of mobilized deposits reaches 68 Mr. Barberini began his co-operative million US dollars. As a financial sys- career in the consumer co-operative tem, they have links with the whole sector and served as President of Lega- co-operative structure of Benin and coop, a multisectoral organisation rep- notably agriculture and women’s resenting over 10,000 co-operatives handicraft cooperatives. He has held with more than 5 million members, the positions of Regional Director, from 1996 to 2002. During his career, Head of Department and more Mr. Barberini has worked closely with recently Executive Secretary. He has European and international move- participated in several ICA activities, ments promoting Co-operative values most recently the regional conference and principles, and has also been for West Africa in 2004 in Cap Vert. involved in solidarity actions for devel- BAHERAN Rahaiah, National Co- oping countries and emergency aid. operative Organisation of Malaysia Candidates for ICA Board (listed in (ANGKASA), Malaysia alphabetical order by surname – Rahaiah Baheran is currently a mem- 15 to be elected) ber of the ICA Board, Chairperson of the ICA Regional Women’s Commit- ARIKAMA CHABI Mouhamadou, tee for Asia and the Pacific and a FECECAM, Benin member of the ICA Gender Equality ARIKAMA CHABI Mouhamadou is Committee since 1996. Madam 27 Baheran is currently Vice-President of CHERAGHALI Abdolrahman, the National Co-operative Organisa- Central Organisation for Rural tion of Malaysia (ANGKASA). She Co-operatives (CORC), Iran has been actively involved in the Abdolrahman Cheraghali has 20 Malaysian Co-operative Movement years experience in research training for 43 years and is also Chairperson of and extension of agricultural in Iran. ANGKASA’s Education Committee He has worked closely with the Food along with being on the boards of a and Agriculture Organisation of the number of primary co-operatives. United Nations (FAO) and is a mem- She is politically active and was ber of the board of trustees of the appointed as Senator in the Upper Karaj Training Centre and Gorgan House of Malaysia Parliament and a University. He is a member of the member of the Women’s Advisory Superordinate Council of Training Council. She was appointed Board and Education Ministry. He has been member of the Malaysian Pertanian involved in research about agricul- Bank for her third term since March tural development, irrigation, agron- 1996. omy and has presented several papers BARTUS Pal, National Federation of at international seminars. He has ini- Consumer Co-operatives and Trade tiated an IT system in the rural co- Associations (Co-op Hungary - operatives of Iran and developed new AFEOSZ), Hungary management methods and informa- tion systems in CORC. He is currently Mr Bartus is President of the National Chairperson of the Board and Manag- Federation of Consumer Co-opera- ing Director of the Central Organisa- tives and Trade Associations of Hun- tion for Rural Co-operatives of Iran. gary. He was elected chairperson of a local co-operative at age of 24 and CHUNG Dae-Kun, National later became chairperson of one of the Agricultural Co-operative Federation largest consumer co-operatives in (NACF), Korea Hungary. He has actively promoted Mr Chung, Chairperson of the NACF the development of trade activities of has been re-elected in 2004 to another co-operatives and in 1997 was elected four year term. He served, before this President/CEO of the newly formed time, as President of the Samranjin Co-op Hungary. He has served co- Agricultural Co-operative, a NACF operative commerce during his entire member for eight consecutive terms, working life and played an eminent elected for the first time in 1975. In part in the establishment of national 1998, Mr. Chung joined NACF as and regional wholesale purchasing Standing Auditor. In 1999 he was organisations. He has served on the elected Chairperson of NACF. As Audit and Control Committee of the Chairperson of the Organising Com- ICA and has been a Board member mittee of the ICA General Assembly since 2003. 2001 in Seoul, he hosted the ICA event successfully and was elected to the 28 Board of the ICA. He has also been that of President and Director-Gen- Chairperson of the IFAP Standing eral of the Group Credit Coopératif, a Committee on Agricultural Co-opera- co-operative bank, which has 98 tives since 2004. branches, 20 affiliated institutions, 1,700 employees and a balance of 8.5 D’AMOURS Alban, Conseil billion Euros. At national and Euro- Canadien de la Coopération (CCC), pean level, Mr Detilleux holds a num- Canada ber of elected positions as a represen- Alban D’Amours, is President and tative of the co-operative movement. C.E.O of Desjardins Group, the largest DOMAGALSKI Alfred, National integrated co-operative financial Co-operative Council (NCC), Poland group in Canada, with assets of US$ 83 billion and 5.5 millions members Alfred Domagalski, a farmer by first and clients. After having distin- profession, has been a co-operator guished himself in an academic career since his school years, active in stu- in the field of Economics, he served in dent, banking, farmer, and worker the Québec government as Deputy cooperatives. From 1995 to 2004 he Minister of Revenue and Associate was Chairman of the General Assem- Deputy Minister of Energy. In 1988, bly of the National Co-operative he joined Desjardins to hold the posi- Council, the supreme organization of tions of Inspector and Auditor Gen- Polish National co-operatives. In 2004 eral of Desjardins Group, Senior Vice- he was elected as President of the President Planning, Communication, Board. He is an active member of the Marketing and Senior Vice-President Polish Peasants Party and, amongst and Chief, Development and Audit. other posts, has been vice president of He was elected in February 2000 and its supreme executive committee. He re-elected by acclamation for a second was a Member of Parliament between term in January 2004. Mr. D’Amours 1990 and 1997. He represented Polish is the recipient of several honorary farmers cooperatives in ICAO and prizes. COPA-COGECA and in 2004 chaired the Polish organising committee of DETILLEUX Jean-Claude, the ICA Regional Assembly in War- Groupement National de la saw. Coopération (GNC), France DVERGSDAL Steiner, Federation of Mr Detilleux is President of the Norwegian Agricultural Co-opera- Groupement National de la Coopéra- tives (Norsk Landbrukssamvirke), tion (GNC), which represents and Norway defends the interest of the French co- operative movement at national and Steiner Dvergsdal is a farmer in the international level. He was elected to western part of Norway producing this position in 1998 and has been an milk and beef. He has been very ICA Board member since 2001. Mr. active in the co-operative movement Detilleux’s principal occupation is in Norway since he started farming as 29 a very young man. He has been a Mr Hazen has been President and board member in consumer coopera- Chief Executive Officer of the tives at a local regional and national National Cooperative Business Asso- level. He has also had several posi- ciation since 1998. Well-known for his tions in the agricultural co-operative knowledge of the co-operative sector movement including one as President and speaks often at national and of the Federation of Norwegian Agri- international forums on the role of co- cultural Co-operatives. He is now operatives in community and eco- chairperson of the board of the largest nomic development. He has led sev- co-operative in agricultural purchas- eral important NCBA initiatives ing and marketing. He chaired the including the creation of .coop, the Norwegian organising committee of top-level Internet domain exclusively the ICA General Assembly in Oslo in for co-operatives. Since coming 2003. online in early 2002, the .coop domain has enhanced public awareness of co- ERMAKOV Valentin, Central Union operatives and created new business of Consumer Societies of the opportunities by allowing co-ops to Russian Federation (Centrosojuz), differentiate their member-owned Russia businesses from other domains. Since Mr Ermakov serves as Chairperson of 1998 NCBA’s international co-opera- the Board of Centrosojuz and has tive development programme has been a member of the ICA Board for grown to more than US$20 million in the last eight years. He is also the first annual funding. Paul Hazen also President of the Association of Co- serves on the boards of the Consumer operative Organisations of Russia. He Federation of America and the NCB has participated actively in the con- Credit Corporation. sumer co-operative movement since IMPERIAL Ramón Zúñiga, Caja 1950 and has been the leader of the Popular Mexicana, Mexico movement for the past 25 years. Dur- ing his office, three consumer co-oper- Mr. Imperial has worked in several ative laws were adopted, notably, a positions in the federal organisation specific programme to stabilise and in the financial sector of the Co-opera- tive Movement in Mexico. He is promote the co-operative movement, currently President of the Caja Popu- the advancement of women and lar Mexicana CPM, a financial co-ope- youth in co-operatives and the estab- rative which has approximately lishment of a newspaper “Russian Co- 900,000 members plus an additional operation”. Mr Ermakov has been 200,000 children who are holders of awarded many governmental awards savings accounts. he has held a including the orders for “services to variety of other positions including the Motherland”. board member of the Co-operative HAZEN Paul, National Co-operative Development Committee in the Par- Business Association (NCBA), USA liament of Mexico, President of 30 COLAC headquartered in Panama, sumura Agricultural Co-operative President of COMACREP, and a serving at the same time as President Board of Director in the International of Kokkaido Prefectural Union of Raiffeisen Union IRU, Germany. He Agricultural Co-operatives. In July has participated in several national 1999, he was elected to the Board of and international events related with the National Press and Information the Co-operative Movement and he Federation of Agricultural Co-opera- has represented the Movimiento Cajista tives. Mr Miyata is also auditor of the Mexicano in different international Central Union of Agricultural Co- congress and conferences. He is also operatives and on the board of IE- co-author of the book, Banca Social NO-HIKARI Association. In August Historia, Actualidad y Retos de las Finan- 2002 he was elected President of the zas Populares, 2001. Central Union of Agricultural Co- operatives (JA Zenchu) and in May MARTENSSON Gun-Britt, HSB 2003 was elected President of Japan Riksförbund (Union of Housing Co- Joint Committee of Co-operatives. Mr. operatives), Sweden Miyata has received many awards. A graduate in English French political MUKASA Joseph, Uganda Co-opera- science Ms Märtensson has played an tive Alliance, (UCA), Uganda active role in politics and was Mayor of her town for 12 years. She was a Mr Mukasa attended Uganda Co- member of the executive committee of operative College from 1969 to 1972. the Swedish Social Democratic party He obtained a diploma in Co-opera- where she was spokesperson for tive Business and Management. He housing policies. Since 1997 she has served in the Ugandan Government been Chair and President of HSB, the as a civil servant from 1972 to 1995 in National Federation of Tenants, Sav- the livestock, credit specialist, educa- ings and Building Societies which is tion and auditing sphere. Mr Mukasa Sweden’s largest organisation for co- has attended numerous international operative housing. She is also board seminars. He is currently Vice-Chair- member of the Nordic Housing person of ICA Africa, a member of the Alliance, the Swedish Co-operative ICA Governance Working Group and Institute and Swedish Co-operative the HRD Committee. He has many Centre. She served as Chairperson of years of experience on public and co- the ICA Audit and Control Commit- operative bodies and has been widely tee until she was elected to the Board published on a number of important in September 2003. co-operative issues. MIYATA Isami, Central Union of ORTELLADO Lourdes Sienra, Agricultural Co-operatives (JA Cooperativa Universitaria, Paraguay ZENCHU), Japan Mrs. Ortellado has been member of From April 1988 to date, Mr Miyata Cooperativa Universitaria Ltda. since has been President of Shinshinot- 1976, an organisation with more than 31 60,000 members. She has held a vari- PENG Seah Kian, Singapore ety of position with the co-operative National Co-operative Federation including member of the Education (SNCF), Singapore Committee, the Credit Committee, Mr Seah Kian Peng is the Chairman of and Board member of Cooperativa Singapore National Co-operative Fed- Universitaria. She was appointed eration (SNCF), the apex body repre- Director of PANAL, Compañía de senting the Co-operative Movement Seguros-Propiedad Cooperativa in in Singapore. Concurrently, Mr. Seah 2003.and continues to hold the posi- is the Deputy Chief Executive Office tion today. During the Regional Con- (CEO) and Chief Operating Officer of ference of ICA Americas in Asunción, NTUC FairPrice Co-operative and the Paraguay in October, 2002, she was CEO of NTUC Media Co-operative. elected Chairperson of the Americas NTUC FairPrice is a leading retailer in Regional Committee of Co-operative Singapore, running a chain of over Women, (CRAMC ICA Americas). As 130 supermarkets and convenience chairperson of this Committee, she stores with a combined turnover of has participated actively in several over US$780 million and a staff of meetings with co-operative women in over 5,000 employees. NTUC Media is Dominican Republic, Brazil, Mexico, in the radio and broadcasting and Paraguay and Canada. publishing business. In February 2003 PASZKOWSKI Janusz, National Mr Seah was elected as a member of Auditing Union of Workers’ Co- the ICA Asia-Pacific Standing Com- operatives (NAUWC), Poland mittee. Prior to his involvement in the Co-operative Movement, Mr. Seah Mr Paszkowski is actively engaged in has worked in both the public and pri- the Polish co-operative movement. vate sectors. He is Board member of He is a graduate of the Law Faculty of various subsidiaries with the NTUC the Jagiellonian University in Group and also serves various public Krakow. At a local level he has been and community organisations. active since 1976 in the workers co- operative movement. From 2000-2004 SCALVINI Felice, Confederazione he was Chairperson of the Supervi- Cooperative Italiane (CONFCOOP- sory Board of NAUWC and since then ERATIVE), Italy has been President of the Manage- Mr Scalvini has a degree in Law from ment Board of NAUWC. He was also the Pavia University in Italy. A solici- a member of the Executive Committee tor and auditor, he first became of the National Co-operative Council involved with the co-operative move- and to date is Deputy President of the ment when in 1976 he participated in National Co-operative Council. At the the founding of one of the first social international level he is a member of solidarity co-operatives in Italy. At a the Executive Committee of CICOPA national level, he is Vice-President of and CECOP. He is also a consultant Confcooperative Brescia, a Board on Polish co-operative law. member of Cariplo Bank Foundation 32 and President of CFI. At the European Cooperative Credit Union in 1989 and and International level, he is a mem- became the Regional Chairperson and ber of the ICA European Council and then the National Vice Chairperson. Executive Committee, a member of She was the first female chairperson the Cooperatives in Europe Council and is now President of the Co-opera- and President of CECOP. He is also tive Movement of Ghana. Vice-President of CICOPA. UTUMI Americo, Organisation of SISODIA Sawai Singh, National Co-operatives of Brazil (OCB), Brazil Co-operative Union of India (NCUI), Mr Utumi has a long career in the India Brazilian co-operative movement, Dr Sisodia is a senior co-operative coupled with a deep knowledge of the leader in his country. He was re- co-operative way of doing business, elected unanimously for the second particularly in the international arena. term of five years as President of Not only a leader and Chairperson of NCUI in March 2005. Dr. Sisodia has relevant agricultural co-operatives been associated with the co-operative and credit unions in Brazil, he also movement for the past forty years and held the position of President of the has worked in various positions at Organisation of Co-operatives of the Sao Paulo State for four mandates. At different levels from the primary level the international level, Mr. Utumi has co-operative society to the national been a very active member of the and international organisations. He is Board of the Organisation of Co-oper- a member of the International Raif- atives of Americas, having partici- feisen Union (IRU) and President of pated in the Latin American Free the Asian Farmers Group on Co-oper- Trade Association. He is also a mem- ation (AFGC), Japan. A Trustee and ber of the Economic and Social Coun- Chairperson of the Indian Association cil of Mercosur of Parliamentarians on Population and Development, Dr Sisodia was a Candidates for Audit & Control member of Parliament for some four- Committee (listed in alphabetical teen years. Author of books and arti- order by surname) cles on different subjects concerning co-operatives, literature, legislative, GICHERU Esther, Co-operative social and culture, his contribution in Bank of Kenya the field of co-operatives, social and Mrs Gicheru has had a long and dis- culture is well recognised. tinguished career in co-operatives SMITH Elizabeth Aba, Ghana Co- both nationally and internationally. As principal of the Kenya Co-opera- operatives Council, Ghana tive College, she has contributed a lot A graduate teacher from the Univer- to the promotion of co-operative HRD sity of Cape Coast and presently in the African region. At the global headmistress of a Secondary Techni- level, she is currently serving as Vice cal School, Mrs. Smith joined the Chair of the ICA Global Human 33 Resource Development Committee. of consumer co-operatives in Japan. She is also an active co-opted member Mr Ogura has also been contributing of the Board of the ICA. Mrs Gicheru to the ICA on behalf of Asian co-oper- has many years of experience on pub- ators as a member of the ICA Audit lic and co-operative bodies and has and Control Committee since 2003. been widely published on co-opera- PEDERSEN Roy Berg, Norwegian tive issues. Federation of Co-operative Housing HOLMES Philip, Co-operatives UK, Associations, Norway United Kingdom Roy Pedersen has been attached to the Philip Holmes is a qualified account- co-operative housing movement in ant and a fellow member of the Char- Norway since 1974. He has held the tered Association of Certified position of Deputy Managing Direc- Accountants. He is currently the tor of the Norwegian Federation of Finance Manager for Co-operatives Co-operative Housing Associations UK. He has been a member of the ICA since 1994. He has studied economy at Audit and Control Committee for the the University of Oslo and is currently last two years and was a member of chairperson of BS Insurance, BS the working group involved in the Media and a member of different production of the ICA financial con- other boards. Mr Pedersen was trol handbook which was issued in elected a member of the ICA Audit December 2004. He is also a member and Control Committee in September of the special working group on inter- 2003 and has chaired that committee national accounting standards. since December 2003. OGURA Shugo, Japanese SITTNER Rene, Konsumverband Consumers’ Co-operative Union eG, Germany (JCCU), Japan Mr Sittner became lawyer in 1994, Mr Ogura has been a long time co- having studied at the Humboldt-Uni- operative leader in consumer co-oper- versitat in Berlin. In that year he also atives in Japan . He serves as Presi- began working for the Association of dent of the Japanese Consumer East German Consumer Co-opera- Cooperatives Union (JCCU) and as tives. From 1996 to 2002 he was the Vice-President of Co-op Kobe, which chief legal adviser of that association is the biggest and most successful and in 2002 he became the executive consumer co-operative society in Vice-President. Mr Sittner partici- Japan with 1.21 million members and pated in the General Assembly of the an annual turnover of 284.7 billion ICA in Manchester in 1995 and in Japanese Yen. He has been playing a Québec 1999. He has also attended as vital role in implementing structural a substitute at meetings of the Audit reform of business and management and Control Committee of the ICA.

34 Rochdale Pioneers Award

The ICA presents the Rochdale Pio- The 2005 Award will be presented at neers Award to a person or, under spe- the General Assembly in Cartagena. cial circumstances a co-operative The nominees are: organisation, in recognition of their CHOMEL André, France significant contribution to innovative DAHLBERG Hans, Sweden and financially sustainable co-opera- GORINI Floreal Edmundo, tive activities that have notably bene- Argentina fited their membership. The first recip- ient of the Rochdale Pioneers Award ITKONEN Raija, Finland was Dr. Verghese Kurien, who MACPHERSON Ian, Canada received the Award at the ICA General MONDRAGON Co-operative Assembly in Seoul 2001. Corporation, Spain The 2003 General Assembly in Oslo PAZ Yehudah, Israel jointly awarded the Rochdale Pioneers THURAISINGHAM Shan, Award to Lloyd Wilkinson, United Malaysia Kingdom and Francisco Luis Jimenez VILLASENOR Florencio Eguia, Arcila, Colombia. Mexico

35 Resolution for Consideration by the General Assembly 23 September 2005 Worker co-operatives are an essential part of the world family of co-operatives especially in connection with decent work and employment. The ICA Board calls on all ICA members and sectors to promote co-operative worker ownership as declared by the CICOPA General Assembly.

World Declaration on Co-operative Worker Ownership Approved in principle by the CICOPA General Assembly held in Oslo on 6 September 2003 Approved by the CICOPA Executive Committee on 17 February 2004

General Considerations compensation resulting exclusively from individual or collective negoti- 1. Humankind permanently seeks a ations; or c) under a third form, qualitative improvement of the called worker ownership, in which forms of organising work, and work and management are carried endeavours to achieve ever better, out jointly, without the typical limi- fairer and more dignifying labour tations of individual work, nor relations. exclusively under the rules of con- 2. At present, human beings carry out ventional wage-based labour. their occupational activities under 3. Among the modalities of worker three basic modalities: a) independ- ownership, the one being organised ently as self-employed, being then through worker co-operatives has defined by one’s own capacities and attained the highest level of devel- self-regulation; b) as wage earners, opment and importance at present under the continuous subordination in the world, and is structured on to an employer who provides a the basis of the universal co-opera-

CICOPA is a sectoral organisation of the International Co-operative Alliance (ICA) 36 tive principles, values and opera- actors in the solution of the prob- tional methods enshrined in the lems of unemployment and social Statement on the Co-operative Iden- exclusion, and as proponents of one tity (Manchester, 1995), agreed of the most advanced, fair and dig- upon within the framework of the nifying modalities of labour rela- International Co-operative Alliance tions, generation and distribution of (ICA), and incorporated in the ILO wealth, and democratisation of Recommendation 193/2002 on the ownership and of the economy. Promotion of Co-operatives. 6. Although CICOPA also affiliates co- 4. Worker co-operatives are committed operatives of individual artisans to being governed by the above- and other forms of co-operative mentioned Statement on the Co- management that are based on the operative Identity. Moreover, it has central concepts of work and pro- become necessary to define at world duction, the present declaration is level some basic characters and aimed specifically at worker co- internal operational rules that are operatives. This does not preclude exclusive to this type of co-opera- that it could be, in so far as possible, tives, which have specific goals and used by and applied to users’ co- purposes that differ from co-opera- operatives that also grant member- tives belonging to other categories. ship and ownership to their workers This definition will enhance the as a differentiated part from the coherence and universal identity of other members in such a way that co-operative worker ownership, their interests are represented ade- stimulate its development, and pro- quately, as well as to all the forms of duce recognition at world level of its management that grant special social and economic function in cre- recognition to human work and to ating decent and sustainable jobs, those who carry it out, such as while also preventing deviations or workers’ limited societies abuses. (sociedades anonimas laborales – SALs) that apply benefits of co- 5. A world declaration is also needed operative nature to their workers, in order to focus on the importance and in general all those enterprises of co-operative worker ownership, of community character that pro- the promotion of worker co-opera- vide special labour relations to their tives, and their relations with co- members besides offering them wel- operatives belonging to other cate- fare services. gories, as well as with the State, international organisations, the entrepreneurial world and the trade On the basis of the above-mentioned unions. This is necessary to guaran- considerations, CICOPA unani- tee the development and promotion mously approves the following of worker co-operatives, as well as World Declaration on Co-operative the full recognition of their role as Worker Ownership. 37 I. BASIC CHARACTERS pendent, before the State and third parties, in their labour relations and On the basis of the definition, values management, and in the usage and and principles enshrined in the State- management of the means of pro- ment on the Co-operative Identity duction. (Manchester, 1995), and incorporated in ILO Recommendation 193 / 2002 on II. INTERNAL FUNCTIONING the Promotion of Co-operatives, RULES worker co-operatives contain the fol- lowing basic characters:1 In their internal operations, worker co- operatives must take into account the 1. They have the objective of creating following rules. They shall: and maintaining sustainable jobs and generating wealth, in order to 1. Compensate the work of their mem- improve the quality of life of the bers equitably, taking in considera- worker-members, dignify human tion the function, the responsibility, work, allow workers’ democratic the complexity and the specificity self-management and promote com- requested by their positions, their munity and local development. productivity and the economic capacity of the enterprise, trying to 2. The free and voluntary membership reduce the difference between the of their members, in order to con- highest and the lowest compensa- tribute with their personal work tions. and economic resources, is condi- tioned by the existence of work- 2. Contribute to the capital increase places. and the appropriate growth of indi- visible reserves and funds. 3. As a general rule, work shall be car- ried out by the members. This 3. Provide the workplaces with physi- implies that the majority of the cal and technical facilities aimed at workers in a given worker co-opera- achieving an appropriate function- tive enterprise are members and ing and a good organisational cli- vice versa. mate. 4. The worker-members’ relation with 4. Protect the worker-members with their co-operative shall be consid- appropriate systems of welfare, ered as different to that of conven- social security and occupational tional wage-based labour and to health, and abide by the standards that of autonomous individual of protection in force in the areas of work. maternity, childcare and minors of 5. Their internal regulation is formally age at work. defined by regimes that are demo- 5. Practice democracy in the decisive cratically agreed upon and accepted instances of the organisation and in by the worker-members. all the stages of the management 6. They shall be autonomous and inde- process. 38 6. Ensure permanent education and 3. To establish capital formation mech- training for capacity building of anisms in worker co-operatives, members and information to the including the contribution to the lat- latter, in order to guarantee profes- ter of risk capital from co-operatives sional knowledge and the develop- of other categories, with an eco- ment of the worker co-operative nomic compensation covering the model, and to stimulate innovation opportunity cost and an appropri- and good management. ate participation in management, without endangering their auton- 7. Contribute to the improvement of omy and independence. the living conditions of the family nucleus and the sustainable devel- 4. To promote the representative opment of the community. organisations of worker co-opera- tives at local, national, regional and 8. Combat their being instruments international level, and the coopera- aimed at making the labour condi- tion among them, and to support tions of wage-earning workers the creation of second-degree enti- more flexible or precarious, and ties, entrepreneurial groups and from acting as conventional inter- consortia and common socio-eco- mediaries for jobs. nomic agreements among co-opera- tives, in order to provide efficient III. RELATIONS WITHIN THE entrepreneurial services, reinforce CO-OPERATIVE MOVEMENT the co-operative movement, and strive for a model of society charac- A strong invitation is made to the co- terized by social inclusion and soli- operative movement in general: darity. 2 1. To make the promotion of worker 5. To promote initiatives that ensure co-operatives one of the main prior- that the State, in its different ities within the world co-operative branches, create and improve the movement, and to effectively con- instruments for the development of tribute to the creation of new enter- this type of co-operatives, including prises of this type. relevant and appropriate legisla- tion. This also implies furthering 2. To establish strategic alliances that petitions to parliamentarians, in foster the development of worker order to make such legislation pos- co-operatives and to make their sible. entrepreneurial projects possible, including the access to appropriate 6. To promote, in so far as possible, the financing, and the promotion of the integration of the wage-earning services that they offer and of the workers of the co-operatives as products that they produce. worker-members.

39 IV. RELATIONS WITH THE and self-employment or inde- STATE AND WITH REGIONAL pendent work, and accept that worker co-operatives apply cor- AND INTERGOVERNMENTAL responding norms and regula- INSTITUTIONS tions. 1. Governments should understand – Ensure the application of the gen- the importance of the promotion eral labour legislation to non- and development of worker co- member workers of worker co- operatives as effective actors of job operatives, with whom creation and inclusion to working conventional wage-based rela- life of unemployed social groups. tions are established. For this reason, governments – Apply to worker co-operatives should not discriminate against the ILO concept of Decent Work worker co-operatives, and should and clear, precise and coherent include the promotion and develop- provisions regulating social pro- ment of this type of enterprises in tection in the fields of health, pen- their policies and programs, in sions, unemployment insurance, order to fight some of the major occupational health and labour problems which the world suffers safety, taking into consideration from, generated as a consequence of their specific labour relations. exclusionary globalisation and development, such as unemploy- – Define specific legal provisions ment and inequality. regulating the fiscal regime and the self-managed organisation of 2. In order to make co-operative worker co-operatives that can worker ownership a real option, the enable and promote their devel- States should establish national and opment. regional regulatory schemes that recognize the specific legal nature of In order to receive an appropriate this type of co-operatives, allow treatment from the State, co-operatives them to generate goods or services should be registered and/or audited. under optimal conditions and to 4. Governments should ensure access develop all their entrepreneurial to appropriate financing conditions creativity and potential in the inter- for entrepreneurial projects est of their worker-members and the launched by worker co-operatives community as a whole. by creating specific public funds, or 3. In particular, the States should: loan guarantees or covenants for the access to financial resources and – Recognize in their legislation that promoting economic alliances with co-operative worker ownership the co-operative movement. is conditioned by labour and industrial relations that are dis- 5. The States and the regional and tinct from wage-based labour inter-governmental organisations

40 should promote projects based on V. RELATIONS WITH exchanges of successful experi- EMPLOYERS’ ORGANISA- ences, on information about, and development of structures of entre- TIONS preneurial and institutional support Employers’ organisations can promote for worker co-operatives, within the the development of co-operative framework of international and worker ownership as an entrepreneur- regional cooperation, for job cre- ial form whose first objective is the cre- ation, sustainable entrepreneurial ation of sustainable and decent jobs initiatives, gender equality, and the with an entrepreneurial added value, fight against poverty and marginali- and as an appropriate exit strategy for sation. the recovery of companies in crisis or 6. Co-operative worker ownership in the process of liquidation, while should be promoted as an option respecting their autonomy, allowing and an entrepreneurial model as their free entrepreneurial develop- much in processes of entrepreneur- ment and without abusing of this asso- ial change and restructuring, start- ciative labour modality to violate the ups, privatisations, conversion of workers’ labour rights. enterprises in crisis, and transmis- sion of enterprises without heirs, as in the concession of public services VI. RELATIONS WITH and public procurement, in which WORKERS’ ORGANIZATIONS the State should define conditioning clauses that stimulate local develop- The co-operative movement should ment through worker co-operative maintain a permanent dialogue with enterprises. the trade unions, as the representatives of the workers, in order to make sure 7. In the context of the relations with that they understand the nature and the State, it is important to highlight essence of co-operative worker owner- the guideline of ILO Recommenda- ship as a distinctive modality of labour tion 193 concerning the necessity to relations and ownership, overcoming endeavour towards the consolida- the typical conflicts of wage-based tion of a distinctive area of the econ- labour, and that they support it in view omy, which includes the co-opera- of its importance and the prospects tives3. It is an area in which profit is that it offers to human society. not the first motivation, and which is characterized by solidarity, par- ticipation and economic democracy.

41 This declaration is in correspondence 2 “The adoption of special measures should be with ILO Recommendation 193 encouraged to enable co-operatives, as enterprises and approved by governments, employers’ organizations inspired by solidarity, to respond to and workers’ organisations world- their members' needs and the needs of society, includ- ing those of disadvantaged groups in order to achieve wide. Therefore, we hope that the lat- their social inclusion” (ILO Recommendation ter consider it seriously, in order to 193/2002, art. 5). contribute to the solution of the grave world problem of unemployment that 3 “A balanced society necessitates the existence of affects humanity and endangers world strong public and private sectors, as well as a strong peace and human rights. co-operative, mutual and the other social and non- governmental sector.” (ILO R.193, art.6); Measures should be adopted to promote the potential of co-oper- atives in all countries, irrespective of their level of Notes development, in order to assist them and their mem- 1 A co-operative is “an autonomous association of bership to (...) establish and expand a viable and persons united voluntarily to meet their common eco- dynamic distinctive sector of the economy, which nomic, social and cultural needs and aspirations includes co-operatives, that responds to the social and through a jointly owned and democratically con- economic needs of the community”(ILO R.193, trolled enterprise” (ILO R193, art. 2). The co-opera- art.4). tive principles are: “voluntary and open membership; democratic member control; member economic partic- In this regard, the ILO Recommendation 193/2002 ipation; autonomy and independence; education, states that “Workers' organizations should be training and information; cooperation among co- encouraged to (…) promote the exercise of the rights operatives; and concern for community" (ILO R193, of worker-members of co-operatives” (art. 16 g). art. 3 (b)).. The co-operative values are: “self-help, self-responsibility, democracy, equality, equity and The Recommendation states that “The promotion of solidarity; as well as ethical values of honesty, open- co-operatives (...) should be considered as one of the ness, social responsibility and caring for others” (ILO pillars of national and international economic and R 193, art 3 (a)). social development” (art 7 (1)).

42 Foreword to Background Paper

There is no final version of the co-oper- ative principles, no permanent defini- tion of the “co-operative identity”. Rather, there are only continuous quests to understand the ultimate rea- sons for co-operative action, the nature of co-operative thought, and the con- tours of co-operative philosophy. Thus, the formalised co-operative movement, from its beginnings, some- Ian MacPherson where in the eighteenth and nine- teenth centuries – if not before – has eration of how the principles can be manifested successive efforts to iden- more deeply applied and their impact tify its essence, no mean feat given its measured…a challenge that the ICA remarkable cultural, economic and might well consider taking up. Per- intellectual diversity. haps it is time to find ways to demon- The last extensive effort is now ten strate more concretely the value of years old, a gasp of breath in the his- “walking the walk”. tory of humankind, but long enough, In a more general sense, what Profes- given the apparent pace of contempo- sor Birchall suggests also reflects the rary change, for co-operators to re- value of constantly revisiting co-opera- engage the quests within the context of tive “fundamentals”: considering the present needs and circumstances. co-operative core – reflecting on co- What follows is a thoughtful reflection operative thought, sentiment and on what was essential and what was action – always rewards those who curious about efforts to define the “co- take the time to do so. It is always help- operative identity” a decade ago. It ful to explore seriously where other presents a broad perspective that committed co-operators have gone, to cumulatively, one might argue, makes burrow below the glib statements that a case for the more systematic consid- can often characterise co-operative

43 action and trivialise its purposes, and petual struggle to relate action to to consider what, within the tradition, thought, purpose to values. is particularly important today. Ian MacPherson Whether one agrees entirely with the British Columbia Institute for points Johnston Birchall raises, his Co-operative Studies challenges deserve to be picked up and considered; his suggestions responded University of Victoria to by co-operators engaged in the per- Victoria, British Columbia, Canada

44 Co-operative Principles Ten Years On

Johnston Birchall

Introduction membership and to curb the techno- cratic power of their managers. Third, One of the original purposes of the there was an ideological crisis, arising International Co-operative Alliance from ‘gnawing doubts about the true (ICA) has been to update and interpret purpose of co-operatives and whether co-operative principles. It did this in they are fulfilling a distinct role as a 1937, again in 1966 and most recently different kind of enterprise’.1 in 1995. The purpose of this paper is to ask whether the relationship between The method of updating was very the values and principles is well democratic; a debate began in the late enough understood, to discuss the 1980s, continued at the 1992 Tokyo impact of globalisation, review Congress and culminated in the adop- progress in the ten years since the last tion of new values and principles at revision, and discuss whether the prin- the Manchester Congress of 19952. ciples have given a ‘co-operative busi- What was different about this revision ness advantage’. The 1995 revision was that it included not only an update arose out of a growing unease about of the Rochdale Principles but an iden- the nature of co-operatives, expressed tity statement and two sets of values well by Alex Laidlaw who identified (basic and ethical) that were meant to three crises in the development of the underlie the principles. To participants world co-operative movement. First, the purpose was clear; drawing on a there was a crisis of credibility; co-oper- long tradition in order to update the atives still had to prove their viability idea of a co-operative, they were hop- as business organisations. Second, ing to revitalise a co-operative ‘move- there was a managerial crisis, because ment’ and give it some future direc- as co-ops became larger they faced the tion. How did it look from the outside? problem of how to keep an active I suppose it appeared that a large num- 45 ber of quite diverse business organisa- ship-based business and to derive tions around the world, whose leaders some principles from it.7 In identifying felt they had something in common, essential policies that a `genuine' were engaging in a kind of mutual member-owned business would have branding exercise. to follow, we can derive the principles of open and voluntary membership; For academics the whole process looks detachment of profit from rewards to rather strange. In social and political capital; voting based on the member as philosophy, the normal way of deriv- an individual; benefits shared in pro- ing principles for action is to begin portion to the use members make of with basic values such as equality and the co-op’s services and so on. What liberty, and work forward. For we cannot do, using this method, is to instance, JS Mill was concerned with derive principles such as concern for liberty, but ended up providing a community and education because strong argument for worker co-ops. these affect people outside the busi- The British historian, Tawney was con- ness. Nor can we derive ‘co-operation cerned about the neglect of fraternity, between co-ops’, because a principle of and this led him to appreciate the solidarity between organisations can consumer co-operative movement's hardly be derived from analysis of the achievements3. In the intellectual his- internal workings of one organisation. tory of co-operatives this approach has been taken several times, and each The method employed in 1995 steered country has its own co-operative a middle course between these two philosophers on which to draw4. academic methods. It was a delibera- However, there is also a tradition of tive approach to principle-building healthy scepticism among co-opera- that provided a practical consensus tors about systems derived from pure about what co-operators felt was thought rather than from experience. important at the time. This means that For instance, the Rochdale Pioneers the values and principles are not ‘set in were influenced by Robert Owen, but stone’; we can expect to review them it could be argued that his influence again some time and keep the co-oper- was less than that of more practical co- ative way of doing business relevant to operators such as William King, who changing conditions. derived his principles from watching Is more work needed on the co- people trying to run co-op stores5. As operative principles? Will Watkins put it in his own work on The values and principles are more of the principles, `The validity of Co- a list than a guide for action; there was operative Principles is founded upon no attempt to rank the values in order the experience and common sense of of importance, or to link them directly the many, not on a revelation made to with the principles and with business or by a few'. 6 practices8. Since 1995, more work has Another method would have been to had to be done to make connections take the underlying logic of a member- between the values and principles, and 46 Table 1: Co-operative values and principles reordered

FIRST ORDER SECOND ORDER PRINCIPLES CO-OPERATIVE VALUES VALUES PRACTICES Political values: Democracy Voluntary/open Member recruitment membership strategy Liberty Equity Democratic member Director education and control training Equality Self-help Member economic ‘Dividend’ cards participation Solidarity Self-reliance Autonomy and Internal capital raising independence Education, training and Marketing the ‘Co-op information difference’ Ethical values: Co-operation among Support for federation/ co-ops shared services co-op Honesty Concern for community Community ‘dividend’ Openness Social responsibility Caring for others to show the relevance of the new for civil society. Yet co-operatives can wording to contemporary co-operative only contribute their share, and there is issues.9 For instance, here is a table a trade off; too much caring for others that distinguishes between political would mean neglecting one’s members, and ethical values, and between first while honesty does not mean sharing order values (which are ends in them- sensitive business information with selves) and second order values one’s competitors. (which are means to achieving and bal- In contrast, the political values can be ancing the claims of first order values), related directly to the principles, but and that then connects up the princi- only if we first separate out those which ples directly with some distinctive co- are ends from those which are a means. operative practices. The famous trilogy ‘liberty, equality, First, the ethical values are worthy ends solidarity’ are usually regarded as ends; in themselves and they can easily be conditions for the good life, however made relevant to co-operative business one wants to live it. They are also, to practices10, but it is difficult to see what some extent, antinomic; we cannot is distinctively co-operative about maximise one without diminishing them. Co-operatives need an environ- another, and so there has to be a trade ment in which markets work well, off between them. Political philoso- political power is kept in check, and phers disagree profoundly about the there is an established civil society. nature of this trade off, some arguing Honesty is a precondition for function- strongly for liberty, others for equality. ing markets, openness a precondition Up to a point, we can maximise both by for democracy, and social responsibility arguing that a certain amount of equal- 47 ity (particularly of opportunity) is ernment action to correct inequalities. needed for people to have positive lib- So it seems that co-operatives have the erty. However, government action to capacity – in theory – to do two things promote equality tends to involve coer- that other forms of organisation cannot cion, and so diminishes people’s indi- do; as businesses they can reward their vidual liberty. Solidarity comes in as a owners equitably, and in so doing they way of determining where the trade off can diminish the need for government should be; the more we care about oth- to correct inequalities. ers and see them as being like our- selves, the more we will be prepared to So it is the second order values of give up some liberty on their behalf. democracy, equity and self-help that are of most interest. The key principles The second order values then come follow directly from them; democracy into focus. Democracy is the fairest implies ‘democratic member control’, means we can find by which this trade equity implies ‘member economic par- off between liberty and equality is ticipation’, self-reliance implies decided (no taxation without represen- ‘autonomy and independence’ and so tation). So far, there are no obvious on. There is an internal logic to this arguments for co-operative business argument that ties some of the values practices. Then, when we come to the and principles in together. However, values of equity, self-help and self- not all the connections are so obvious. reliance, from a co-operative point of The principle of ‘concern for commu- view we strike gold. Here we find the nity’ can be derived from the ethical strongest argument for co-operatives values of ‘social responsibility’ and which goes like this. Markets tend ‘caring for others’, but the argument towards inequality, and do not guar- here is a tautology; we should be con- antee that everyone will have their cerned for others because we are con- basic needs met. If we can find a way cerned for others. At first sight, the of doing business that rewards people principle of ‘co-operation between co- equitably, we will be able to distribute ops’ can only be argued from a prag- the fruits of economic activity in such a matic point of view, that it enables way that it will not build up inequali- individual co-operatives to be more ties. Because they reward people for self-reliant. This principle can only be the use made of the business rather argued convincingly if co-operators than for the amount of capital they share the vision of a more equitable have invested, co-operatives have economic system and have faith that equity built into them. In an co-ops can provide it. inequitable market system, govern- ments have to step in to ensure that cit- Even the strongest argument, for what izens can survive, but in doing so they we might call the ‘inbuilt equity can endanger liberty. Equitable busi- advantage’, has its weakness. The nesses that are democratic, work problem is that anyone can form a co- through self-help and are also self- op. There are co-ops of landless peas- reliant will decrease the need for gov- ants renting land to keep a cow, and 48 there are co-ops of rich farmers want- cult practical decisions that members ing to process and export their prod- and managers have to make. ucts. There are co-ops of marginal Finally, there is a view that those co- workers in the informal economy operatives that are operating in global wanting basic sickness insurance, and markets – particularly agricultural co-ops of professional people seeking a marketing and processing co-ops – comfortable pension. There are co- cannot afford to internalise the ICA operative banks that, without intend- ing to, recycle money from rural values and principles, but have to economies to urban businesses. In gen- work with a slimmer and more self- eral, co-ops benefit lower income peo- centred set of principles just to survive. ple more, but they do not necessarily In 1987, the US Dept of Agriculture always benefit the worst off. They are adopted just three principles of user internally equitable, but not necessar- ownership, user control and user bene- ily a force for greater equality. It can be fits, corresponding roughly to the first argued that, in general, they benefit three ICA principles. These are the those on low to middle incomes more, kinds of principles that can be derived but the argument has to be made on an from the internal logic of a co-opera- empirical basis, as well as in theory. 11 tive, and they have nothing to say about any wider social responsibility, When we come to the next stage, of but their market advantages may be connecting up the seven principles to clearer and easier to demonstrate. business practices, we are on much firmer ground. It is not difficult to see All of this means that there is still work how the principle of member democ- to be done on the co-operative princi- racy demands some kind of member ples. There is some hard thinking relations strategy, a policy on informa- needed to evaluate the ways in which tion giving, and so on. It is obvious values have been connected to princi- that for the participation of members ples and, crucially, the ways in which in the economic benefits some kind of business practices have given expres- patronage refund is needed. It is less sion to them. The key questions are: obvious how the principle of member what impact have co-operative values, benefits balances against that of con- principles and identity statement been cern for community, because they are used in the last ten years, and have they often both paid for out of the same sur- led to a ‘co-operative business advan- pluses. For instance, a large consumer tage’? However, before answering co-op may have to decide whether to these questions we need to understand develop new types of co-op or give the impact of globalisation. grants to community organisations. The changing environment for An electronic ‘dividend card’ can be co-operatives open to all customers or only to mem- bers. Just as there are trade-offs Globalisation is both a threat and an between values, there are trade-offs opportunity for co-operatives. But to between principles, expressed as diffi- identify these accurately we have to 49 ask two questions: what is globalisa- ation is much more urgent. For tion, and how extensive is it? A simple instance, if pressure from transnational definition makes it entirely an eco- multiple chains is low, consumer co- nomic process: ‘the removal of barriers ops may feel they can stay within to free trade, and the closer integration national boundaries and concentrate on of national economies’12 but a more differentiating themselves from their inclusive definition also includes cul- national competitors. But if Walmart tural factors: it is the and IKEA continue to make an impact, closer integration of the countries and peo- this strategy may need revising. To ples of the world which has been brought complicate things further, the pace of about by the enormous reduction of costs of change may be different depending on transportation and communication, and what market one is in; agricultural pro- the breaking down of artificial barriers to cessing may be regionalising while the the flows of goods, services, capital, knowl- supermarket chains on whom the food edge and (to a lesser extent) people across processors depend are still be tied borders.13 mainly to national markets. We might find economic globalisation a Another complication is that one of the threat but cultural globalisation an effects of economic globalisation is to opportunity, or vice versa. For instance, increase inequalities, both within and the increasing density of cultural links between countries.14 It will have a dif- should help spread the co-operative ferent impact on co-operatives in the principles from country to country, developed and developing countries. though at the same time people are Some benefit while others lose out. For being bombarded with images of instance, co-ops in South Asia and investor-ownership as being the nor- China may benefit from rising pros- mal way to do business. Second, how perity, while those in sub-Saharan extensive is globalisation? Economists Africa, where economic output is argue over this. It is possible to demon- falling, may go out of business. strate that exports accounted for a Through promoting fair trade between larger proportion of the world economy co-ops in the developed and develop- in the 1920s than they do now, but of ing countries, co-ops can work course at that time local economies together for mutual benefit. Liberalis- were much more important. It is possi- ing trade and breaking down tariff ble to distinguish between flows of cap- barriers will help this process, but they ital – which are very extensive – and will also expose co-ops in the devel- flows of goods, which are still confined oped world to greater competition. mainly to world regional markets There is already, indirectly, competi- rather than truly global markets. This tion between producer co-ops in question about the pace of change is developed and developing countries important because if it is slower than in primary products such as cotton, expected it gives time for co-operatives coffee and rice. Currently, the terms of to meet the challenges, whereas if it is trade disadvantage the poor, which fast, perhaps even accelerating, the situ- includes co-operatives of the poor. 50 Finally, globalisation is not a neutral dence from failed ventures points to concept. The rhetoric of globalisation the need to ensure that there is a mem- is being used by people with vested bership base in the region or country of interests, who argue that because of it expansion, otherwise the co-op will co-ops have to take one direction or not succeed. To act globally, they have another. Arguments for merger, ratio- also to think locally, convincing local nalisation, even demutualisation, can communities that they have something be made more compelling by use of to give, in the form of a local store, or this rhetoric. For instance, recently bank branch that is to some extent managers of Irish agricultural co-ops owned and controlled locally. The argued that, because of globalisation, expansion of Eroski into France is suc- there was no choice but to seek plc sta- ceeding because of a tie-in with a tus, whereas in other countries such as shared service co-operative of local Denmark other alternatives were traders. The UK Co-operative Group’s sought that preserved the integrity of three tiered democratic structure, in user-ownership. 15 which area committees have a say over local stores, is another good model.16 The ICA needs to have a self- con- scious and well worked out position The other strategy is to act locally. on this. It could be that co-operatives There is a bewildering variety of co- have to develop two distinct, and operatives and social enterprises that opposite strategies that can be sum- have remained small and locally con- marised as: trolled, whose members have no wish to see them grow.17 They prefer to • thinking locally and acting globally develop federal structures that allow • thinking globally and acting locally for joint representation and shared services rather than mergers and Large co-ops will have to ‘act globally’ aggressive growth strategies. Most by expanding beyond national bor- credit unions, locally and regionally ders. I have in mind here the UK, Scan- based consumer co-ops, housing, dinavian, Italian and Swiss consumer worker and social care co-ops share co-ops, US, Australian, New Zealand, this strategy. More and more they are Brazilian and Canadian agricultural thinking globally, that is, working out co-ops, the Dutch and German feder- how to counteract globalisation ated co-op banks, and the consumer through meeting the needs of local and worker co-ops in membership of people directly. They use a mixture of the Mondragon system. Some are paid work, mutual aid and volunteer- already doing this, but are not finding ing, are registered under a variety of it easy. They can act like conventional laws (not all of them co-operative), and companies and form partnerships with are funded through a variety of investor-owned businesses, or can co- sources: their own trading activities, operate with existing co-ops in other local government contracts, grant aid, countries, or where there are no co-ops ethical investors, income from commu- help to start up new ones. The evi- nity land trusts and so on. What they 51 have in common is that they develop values (and becoming prey to demutu- tailor-made solutions to local prob- alisers), and how to keep a loyal mem- lems. Increasingly, they are seeking bership rooted in localities. Tradition- innovative collaborations across sec- ally, the key to co-ops obtaining the toral divides; consumer co-ops are advantages of both large size and local sourcing food from local farmers, pro- control has been federation, but feder- ducer co-ops are running farmers’ ations have not had a good record in markets, and multi-stakeholder co-ops acting decisively enough, or with of both producers and consumers are enough authority, to keep up with the finding ways of producing organic globalisation dynamic. A national- food for a guaranteed market. Such level co-operative that can form small, locally based co-ops are an alliances trans-nationally but have a engine of local economic development. decentralised structure may be the Sometimes co-operative networks take answer. In the future, we may find a the lead in this; the Desjardins devel- new mix of large and small, with local opment programme in Quebec, and societies accepting the discipline informal economy projects in Africa imposed by a national or international are good examples.18 body in exchange for being players in Are these the only two viable strate- the global market. gies? There may be a third. Where How far have the identity statement, large co-ops still have a local presence values and principles been put into (consumer co-ops with local commit- practice? tees, banks with a federal structure), there can be a capacity to act locally Bearing in mind these points about the and globally at the same time. For global business environment, we can instance, the fair trade towns initiative now try to evaluate the impact of the in the UK, attempts by large consumer new co-operative values and princi- co-ops to source food locally, a co- ples. The new Identity Statement has operative banking policy of lending at been extremely helpful in defining the preferential rates to local small busi- co-operative difference. It carefully nesses, are examples where acting includes the main principles, in such a globally does not mean one cannot way that the reader can be in no doubt also act locally. However, what is not about what a co-op is and is not, or to viable is a strategy of avoiding the put it another way, which organisa- whole issue of globalisation/localisa- tions can call themselves co-ops and tion and attempting to trade some- which cannot. At the international where in between; agricultural and level, the Statement has been an out- consumer co-ops that are currently standing success. It has been the cor- based at a regional level in one coun- nerstone of the United Nations Guide- try, for instance, may be neither large lines of 2001 and the International enough nor small enough to survive. Labour Office Recommendation 193 The key question for them is how to concerning the promotion of co-opera- grow without losing their co-operative tives of 2002, and has recently been 52 endorsed by the European Commis- ference may be partly attributable to sion.19 At the national level, it has there being, say, a network of agricul- enabled co-operative sectors to enter tural co-ops. This would be a measure dialogue with their governments, in of equality. Or we might calculate the order to improve co-operative legisla- total amount put into a community in tion and create a level playing field for a patronage refund by a consumer co- co-ops in their commercial environ- op, or the amount saved by credit ment. As a result, it has been incorpo- union members in fees paid for send- rated into many new co-operative laws ing remittances back home to poor rel- in Africa, Asia and the countries in atives. These would be indicators of transition from communist rule. equity. Or again, if we could show that National federations have been able to people have become less indebted to use it as a starting point in defining moneylenders as a result of joining a what they do, and many individual co- micro-credit scheme, this would be a ops use it on their websites and public- measure of self-reliance. By doing ity material. careful case studies of co-operative success stories, we can demonstrate However, its use varies between sec- the route back from practices through tors; agricultural co-ops tend to prefer principles to values.21 What we cannot simpler formulas such as ‘farmer- do at the moment is to generalise from owned business’ or ‘farmer associa- these to whole co-operative sectors tion’, while many consumer co-ops are because the evidence is not available. still unclear about the difference Table 2 makes some generalisations between members and customers, and that can be supported by evidence, but credit unions have their own separate it is just a start. ways of expressing their identity. In some developing countries, notably Now let us look briefly at each of the India, the new co-operative laws have principles and ask to what extent they been applied to a new wave of co-ops have been put into practice. First is while leaving older ones unre- voluntary and open membership. Volun- formed.20 In other countries there has tariness is no longer the issue it was in been political resistance to the new the days of communist and post-colo- laws. In practice, the Identity State- nial regimes that planned co-opera- ment could be much better appreci- tives on a compulsory basis; these days ated and more extensively used. nobody is forced to join a co-op. Regarding open membership, the It might be thought that, because co- main issue has been whether women operative values are expressed through are being left out of membership. the principles, the values cannot be While co-ops have a good track record measured directly. Yet we can think of in this respect22, and women’s co-ops ways of measuring whether they have are redressing the balance,23 gender been put into practice. For instance, discrimination in membership remains one region might have a flatter income a problem.24 During the last ten years, distribution than another and the dif- another issue has begun to be impor- 53 Table 2: Have the principles been put into practice?

Co-operative sector Use of identity Reference to co-op Reference to co-op statement? values? principles? Consumer co-ops Growing, but only at Patchy, but developing Yes, but benefits of ‘cutting edge’ (Co-op through fair trade, membership often Group, Legacoop etc) honest labelling, anti- unclear, member GM, community shops education not yet etc integrated with market- ing, PR, and potential of employees neglected Producer co-ops Not much (except Not much – mostly Only in cut down (agricultural, but also Japan?). Loss of identity looking to ‘add value’ version (member fisher, forestry etc) in demutualisation, for farmers. But some ownership, control, hybridisation. Use of solidarity with rural benefits). But new synonyms such as economies understanding of the ‘farmer association’ value of farmer control Worker co-ops Growing. No reason Yes, particularly Yes, but expanded with why not. solidarity and equity Mondragon and ‘decent work’ principles Health and social care Yes (eg Unimed), but Yes, and experiments in Yes- explicit in case of co-ops competition from ‘not shared values through Unimed, Puget Sound. for profit’ identity in multi-stakeholding Competition from USA, UK ‘public interest’ princi- ples Housing co-ops Patchy – often not aware Yes – localism is an Yes, but need for govt of wider co-op move- advantage. Small scale loans, grants sometimes ment. Other identities means direct democracy works against auton- compete (non profit, can be practiced omy. Easy to demon- housing association) strate member benefits Credit co-ops Yes, but competes with Yes at international level Explicit use by larger other identities, such as (WOCCU etc). Local- banks (Rabobank, credit unions ism/regionalism can be Raiffeisen, UK Co-op an advantage Bank). But overlap with other principles (eg ethical investment) Insurance/pensions/fin Not much – competes Yes at international level Different traditions ancial services co-ops with ‘mutual’ and other (ICMIF etc), but general (friendly socs in UK, and mutuals identities (S&L, building assimilation to dominant mutuals in France) not society) commercial values connected to ICA. Some very large commercial mutuals with no principles! Co-ops in developing Yes – in new laws, but Not well recognised, Beginning to be applied, countries ignorance of the co-op except in discussion of as governments with- form/poor reputation co-ops as civil society draw. But poor perform- lead to use of synonyms organisations ance, lack of HR capacity (self-help group, farmer obscure them association) Co-ops in general – Poor performance/ Values are difficult to Co-op principles may some paradoxes image within sector may operationalise. The least compete with other lead to deliberate distinctive co-op values worthy sets of principles avoidance of co-op (ethical ones) may be the (CSR, environmental identity by successful co- most useful! bottom line, AA 1000, ops! Investors in People) 54 tant, concerning the ‘responsibilities of cons of good practice, achieving amaz- membership’. Co-ops are dividing into ing improvements in member partici- those that virtually give membership pation, but with a ‘long tail’ of poor away and those that value it enough to performers. ask prospective members to make a In the developing countries the ques- financial commitment. Contrast con- tion is vital, because co-ops set up by sumer co-ops in the UK with those in governments have, in many cases, yet Japan whose members have to pay to become member-controlled. The around 40 times more for membership. Compare conventional agricultural co- IMF’s structural adjustment policies of ops with the ‘new generation’ co-ops the 1980s and 1990s have culled tradi- that require a capital investment pro- tional co-operative sectors (particu- portional to the use to be made of the larly multi-purpose agricultural co- co-op. This is an issue that will become ops, co-operative banks and federal more important. Globalisation is bodies). New co-operative laws have requiring capital intensive co-ops (eg made it clear that governments’ obli- in food processing and high tech man- gations are to free co-ops from state ufacturing) to find more capital, while control. Yet there is still a great deal to the threat of demutualisation requires be done. In some countries such as them to reward members for growth in India and Sri Lanka, a two tier system the business with bonus shares. Open is being created, of old and new co- membership does not have to mean operative sectors, and it is uncertain as easy membership.25 to whether the old sectors can be revi- talised.27 In most countries, the credit Second is democratic member control. union movement has always been a Have co-ops become more democratic model of good practice, because it has in the last ten years? It is hard to tell. developed with the idea of member There is certainly a new interest in democracy firmly at its base. governance, but this has been prompted more by developments The third principle is member eco- among co-operatives’ competitors nomic participation. The key question than by any desire to become a leader here is whether co-operatives are effec- in the field of economic democracy. tive enough as businesses to reward There are co-ops that have developed their members with economic benefits. a strategy for membership26 and Mistakes continue to be made, and improved their election turnouts and when co-ops become detached from made elections more competitive. But their members and cease to provide it is hard to make generalisations. For regular benefits they become ripe for instance, in the UK there are two demutualisation. For instance, some national and two regional co-ops that Irish agricultural co-ops have been lead the way in democratic practice, sold off, after a long process of defor- but 36 others that lag behind. The same mation in which non-users were is true of the UK’s building society and allowed to hold shares, and member mutual insurance sectors; a few bea- benefits were not aligned with the 55 increased value of the business.28 At The fifth principle concerns education, the opposite pole, when co-operatives training and information. It identifies work in areas (such as sheltered several target groups and distin- employment and social care) usually guishes three types of provision. Table reserved for non-profits, they can 3 unpacks this principle and shows come up against resistance to the idea how much work has to be done to put of a patronage refund, and it has to be it into practice. Transmission of the co- defended as a key principle. Social co- operative message used to be achieved ops in Italy and the UK have faced this more through informal channels; in problem. Western Europe, for instance, a sym- pathetic working class culture was The fourth principle is autonomy and also, to some extent, a co-operative cul- independence. In the last ten years, this ture.30 These days, the need to inform principle has been compromised in two the public of the basic co-operative directions. First, governments in devel- message has become vital, and we oping countries have not gone far have to do it more formally through enough in relinquishing control over public relations work, commercial traditional co-operative sectors. The advertising, schools projects and so on. poverty reduction strategy process The task is helped by one aspect of entered into by countries seeking debt globalisation, the IT revolution, which relief may lead to increased govern- has vastly increased the amount of ment control, because co-ops will once information that is flowing, and the again be harnessed to national eco- speed with which it flows. Co-op web- nomic plans and targets.29 Second, sites are becoming really important, under pressures from global competi- and so the new Co-operative Learning tion, some co-ops have sought to raise Project which will link these together capital from outside investors; large is vital. The problem is that everyone agricultural co-ops, parts of the Mon- who is linked globally is being bom- dragon system, the internet service barded with information, and the co- provider, Poptel, are just some exam- operative message is just one small ples. In most cases some loss of control voice. has been experienced, and it is vital that ways be found of capitalising fast- What about informing of opinion for- growing co-ops in global markets with- mers? Some co-op federal bodies and out this loss of control by members. development agencies have been

Table 3: The ‘education principle’ unpacked

Elected Managers Employees The Young Opinion reps public people formers Informing x x x X X X Educating x x x X X Training x x x

56 doing a remarkable job in explaining Training is a blend of informing and the ‘co-operative difference’; exem- educating that is aimed at getting plars are the National Rural Electricity results from those who govern and Co-ops Association., the National Co- manage co-ops. Director training, operative Business Association, and linked to governance, is becoming uni- the Overseas Co-operative Develop- versal. Manager training, linked to the ment Council in the USA, Co-opera- co-operative difference and the busi- tives UK, Legacoop in Italy, and so on. ness advantage, has been led by such Yet there are also co-operative agen- large co-ops as the Co-operative cies working in the international Group in the UK. But the immensity of development ‘market’ who, in the the task is daunting; for instance, after process of bidding for projects, have resisting an attempted takeover bid, allowed the co-operative difference to the Group embarked on the training of become unclear.31 What about inform- 3000 managers.32 Not many large co- ing of young people? The youth initia- ops have been able to ‘roll out’ this tives of the ICA, of the UK Co-opera- training to front-line staff. Again in the tive College are exemplary, but a much UK, the successful regional co-op, greater effort is needed if the co-opera- Oxford Swindon and Gloucester, has tive message is to survive, let alone found a way to do this by training one become more popular. person from each store, who then trains everyone else. In developing Beyond informing, there is educating, countries, the need for training is and the vital task of getting the co- acute; leader in this field has been the operative message into the educational Co-operative Branch of the Interna- system has only just begun. There are tional Labour Organisation, that has schools projects in which young peo- run major projects in human resource ple learn how to set up and run co- management in co-ops.33 operative businesses. At the other end of the system there is the new Interna- In developing countries, the lack of tional Masters in Co-op Management knowledge and appreciation of co-ops based at St Mary’s University in Nova is seriously hampering attempts to get Scotia. In between there is a huge gap. co-operative sectors involved in The failure to engage with the aca- poverty reduction strategies.34 For demic world is scandalous. There are instance, the recent report from the few courses, there is no dedicated Commission for Africa contains only international academic journal, and one or two mentions of co-operatives. only in a few countries is there a recog- In some cases, existing sectors are nised career path; we require a sacri- overlooked because they are not yet fice from academics who want to spe- free of government control, are used as cialise in co-operative studies. instruments in the delivery of state- However, some successful consumer determined services, and need to be co-ops, such as Migros in Switzerland reformed.35 In others, genuine co- and Kobe in Japan, achieve much by operative sectors are overlooked focusing on adult education. because they are self-sufficient and do 57 not ask for help from aid agencies.36 In tural co-ops remaining quite insular almost all developing countries, the and member-focused (except in Japan, lack of strong apex federations able to where they continue to have a much spread the co-operative message is wider role in providing community crucial. Where federations have the services). What we do not know is will and the resources – as in the where the trade-off between member SANASA system in Sri Lanka – co- benefits and community benefits is operative education and training has being made, and whether it is in the been shown to be very effective. long-term interests of members. The sixth principle is co-operation Have the principles enabled a among co-operatives. In the last ten Co-operative Advantage? years, the need for this has become Is there a co-op difference? Is there a acute, yet economic globalisation is not co-op advantage? The difference is a process that co-operatives can take to logically prior to the advantage: there easily. Being people-centred rather may be a difference that confers no than capital-centred, they do not tradi- advantages, but we cannot have the tionally extend beyond national advantage without the difference. So boundaries. Think of the struggles that what is the difference? It has to be consumer co-ops have had in Western based on the core principles rather Europe over merger between local than the values; other types of organi- societies; even creating one national- sation share similar values – trade level organisation is highly controver- unions, non-profits, NGOs for sial, and is more likely to succeed if instance. Also, some of the principles some local autonomy is retained. The are also held by others: concern for same can be said for Raiffeisen-type community and education are com- co-operative banks and credit unions. mon to community organisations, Agricultural co-ops are facing the most social enterprises, charities and so on. intense pressures to go trans-national, The difference resides in the three core particularly where they are dependent principles: member ownership, control on export markets or need to add and benefit. These are enough to dif- value through food processing, but ferentiate co-ops from other types of they can more easily do it because their organisation and provide arguments members are a more concentrated that give them great significance as interest grouping than are local con- people-centred businesses. But to sumers. make any impact the differences have to be known. The final principle is concern for com- munity. We know that this principle How aware are people of the co-opera- has had an impact, and can point to tive difference? A recent study of many examples where it has been put mutuals in the UK shows that cus- into practice. In general, consumer co- tomers consistently trust mutual ops and credit unions have been lead- building societies more than banks, ers in this respect, with larger agricul- but they are not sure why. In a study of 58 Canadian non-financial co-ops, 60 per- Have co-operatives been able to iden- cent of those questioned said ‘their co- tify a co-operative advantage? Has this op and their members did contribute been more successful in some sectors to their communities in ways that are than in others? Are the advantages dif- very different from other businesses’.37 ferent in each sector? Are there sectors But they had difficulty in identifying where there is no real advantage and, their uniqueness, because they found it if so, does this mean co-ops should hard to separate themselves out from only operate where there is an advan- their community. In a qualitative tage? These are important questions study of Canadian co-op members, with complex answers. One research Fairbairn concludes ‘there is a co-op project in the UK has found that, while difference, beneath the surface, that values training for managers and co- few people have the vocabulary to op members does work (and has describe’.38 They do grasp the differ- recently been rolled out to many of the ence in the ownership structure but consumer co-operatives in member- lack a language to put this into words. ship of Co-operatives UK), co-opera- The co-operative movement has not tive values ‘are sometimes seen as something separate or extra, as addi- yet succeeded in communicating the tional costs and constraints on free- ideas of member ownership, control dom, rather than an integral part of and benefits so as to make them more core business’.39 Consumer co-ops explicit. need to develop more inclusive busi- Assuming that the principles, when ness strategies that include a clear consciously applied, do make co-opera- statement of the co-operative differ- tives different, the next question is ence that they are trying to deliver. whether this is good for their business. This research could be a model for There are at least four logical possibili- research on the Co-operative Advan- ties: the principles are good for busi- tage in other sectors and countries. In ness, bad for business, have no notice- the absence of systematic findings, the able effect on the business, or some of table below attempts to summarise them are good and some bad for busi- much of what we know: ness. The last of these is the most plau- There are some common themes here: sible. For instance, it is generally high levels of trust among customers; assumed that providing benefits to the return of economic benefits to members is good because it encourages members; ethical trading; the avoid- loyalty, but that member democracy is ance of profit-taking by a separate costly and can slow down decision- class of investors. There are some making. If on balance the principles are advantages peculiar to particular sec- bad for business, then it is possible that tors. In sectors such as social care, in putting principles into practice co- health care, home loans and pensions ops could under-perform compared the quality of the product is difficult to with their competitors and, as a result, measure, it is sold through long-term, go bankrupt. open-ended contracts, yet exit costs are 59 Table 4: The Co-operative Advantage

Co-operative sector Co-op advantages Co-op disadvantages Consumer co-ops Patronage refund; ethical Customers get benefits trading (eg fair trade, honest without being members; labelling); local knowledge; competitors can copy advan- member loyalty tages; risk of manager capture Producer co-ops (agricultural, Member benefits (better Difficulty raising capital; but also fisher, forestry etc) prices, patronage refund); slower decision making; risk member loyalty; share in of manager capture value (bonus shares); farmer/producer control Worker co-ops Worker control; job security; Access to capital; self-exploita- ‘decent work’ (cf ILO stan- tion;management problems dards); local economy (but Mondragon system solves these?) Health and social care co-ops Multi-stakeholder member- Dependence on govt con- ship (worker and consumer tracts/ price setting; potential involvement); high trust, long self-exploitation of workers; term contracts difficult to control costs; power of medical profession Housing co-ops Locally based; sense of Dependence on govt grants; community; control over hard to manage; can’t compete environment/neighbours; with owner occupation; quality, low cost housing; out- legally complex (house- performs public sector building co-ops for owner occupation simpler) Credit co-ops Locally based; low interest High risk of failure, leading to rates (avoids profit taking); over-regulation; need to grow collective guarantees to compete with banks; (low default rate); ethical manager capture; pressure marketing to adopt high pressure marketing Insurance/pensions co-ops High return (avoids profit Neglect of membership and mutuals taking); high trust, long term (leading to governance contracts; member benefits problems, capture by elite); instrumentalism (lack of co-op tradition) Co-ops in developing Potential partners in poverty Poor reputation from past countries reduction/local economic mistakes; govt interference; development strategies; business weakness; lack of delivery mechanism for management/ leadership health education/ insur- skills; lack of capital; member ance/credit; self-help poten- participation tial; empowerment of women

60 high. Here, the co-operative advantage are a growing number of multi-stake- is all about trust and good governance, holder co-ops (particularly in the health yet it is in the mortgage and insurance and social care fields) offering joint markets that the most demutualisation membership between consumers and has occurred. However, there is some workers. In its favour is the argument evidence that consumers are choosing that still, in many co-ops, the potential to return to mutuals, and that trust of employees is undervalued, and such remains a real advantage.40 In sectors a principle would force them to take such as housing, worker co-ops, and notice of the issue. The Canadian Co- credit unions, there is a built in advan- operatives Association has recently tage from being locally owned and suggested a new principle recognising controlled. However, at this level the the contribution of employees. There co-operative message can be lost may also be a need to introduce a prin- because they are seen as part of a ciple of compliance; that any co-opera- wider social or community enterprise tive not adhering to co-operative princi- sector.41 ples should face sanctions from its In developing countries, the main national federation. This would make issue is whether co-operatives are sense if we are to counter the under- going to be able to convince the inter- standable reluctance of successful co- national development community of ops to be identified with others that are their unique advantages in poverty failing to live up to their principles. reduction strategies and in achieving What are the threats facing the co- the Millennium Development Goals. operative principles? They come from Here a start has been made, but there is two opposite directions. One is to the much still to be done.42 dilution of the ownership principle The future for co-operative through co-ops offering shareholdings principles with voting rights to outside investors. In this case, co-ops are assimilated to Are the values and principles evolving? the dominant form of the investor- Are new principles emerging? Will we owned business. The other threat is have to revise them again soon? There dilution of the membership principle is a case for an environmental principle, through expansion into general com- that challenges co-ops to be concerned munity-based activity, and contracting for the wider environment, though to deliver public services. In this case, some people think that this is implicit in co-ops could become more like the the ‘concern for community’. In 1995 non-profit sector, losing the sense of a some co-operators were disappointed distinctive membership who should be that there was no principle establishing rewarded with economic benefits. the rights of employees to participate in decision-making and in the economic What are the opportunities? Here is a results. Against this, consumer co-oper- sketch of an optimistic future that may ators would argue they already have be opening up. In this future, the prin- employees in membership. Also, there ciples will be used increasingly as a 61 framework for evaluation, for deter- Notes mining the co-operative ‘bottom line’ 1 Laidlaw, A (1980) Cooperatives in the Year 2000, and measuring co-ops’ promise Geneva: ICA/CEMAS p.9 against their performance. They will 2 . Book, S (1992) Co-operative Values in a Changing World, Geneva: ICA. be used by federations to certify co-ops 3 . Tawney, (1964) Equality, London: George, Allen and as being genuine and to keep up stan- Unwin, ch.5. dards. Crucially, ways will be found to 4 The French have Buchez, the Japanese Kagawa, the operationalise co-operative principles Germans Raiffeisen, the Americans Warbasse, the Canadians Coady and Desjardins, the Basques so that they provide clear competitive Arizmendi, and so on. advantages, which co-operative man- 5 See Birchall, J (1994) Coop: the People’s Business, agers will be motivated to implement Manchester: Manchester University Press, Ch.2 in their day to day operations.43 For 6 Watkins, W (1986) Co-operative Principles, Today and instance, the member relations func- Tomorrow, Manchester: Holyoake Books, p.14 tion will be linked to public relations, 7 See Parnell (1995) Reinventing the Co-operative: Enterprises for the Twenty First Century, Oxford: marketing and human resources, in Plunkett Foundation such a way that the communications 8 See Birchall (1998) `Co-operative values, principles and actions of a co-op are consistent in and practices: a commentary’ Journal of Co-operative Studies 30.2, pp.42-69 their message and can be traced back 9 44 Birchall 1997 The International Cooperative Movement, to the principles and values. In mar- Manchester University Press keting the emphasis will be on ‘rela- 10 Bickle, R and Wilkins, A (2000) ‘Co-operative tionship marketing’ between the co-op values, principles and future – a values basis to building a successful co-operative business’, in Journal and its members, and ‘character mar- of Co-operative Studies, 33.2, 179-205 keting’ of the co-op as a value-based 11 Birchall, J (2003) Rediscovering the Cooperative business.45 Advantage; Poverty reduction through self-help, Geneva: ILO If the task of the last ten years has been 12 Stiglitz, J (2002) Globalisation and its Discontents, to make the values and principles London: Penguin, ix known, perhaps in the next ten years 13 Stiglitz, op cit p9 the emphasis should be firmly on 14 Sassen, S (1994) Cities in a World Economy, operationalising them, making them Thousand Oaks: Pine Forge Press count in co-operative business prac- 15 Nilsson, J (2001) ‘Farmer co-operatives: organisa- tional models and their business environment’ in tice. If we are going to have a Princi- Birchall, J (ed) The New Mutualism in Public Policy, ples Commission to take the work for- London: Routledge ward, this should be its main focus. 16 Birchall, J and Simmons, R (2004) ‘The involvement of members in the governance of large-scale co- Several people have had an input to this operative and mutual businesses: a formative evalua- tion of the Co-operative Group, Review of Social paper. In particular, the author would like Economy, 12.4, December 2004, 465-486 to thank Garry Cronan, Mervyn Wilson, 17 Johanisova, N ( 2005) Living in the Cracks: a look at Paul Hazen, Jerker Nilsson, Tom Webb, rural social enterprises in Britain and the Czech Leslie Brown, Hans Dieter Seibel, Jırgen Republic, Dublin: Feasta Schwettmann, Ian Reid and Yohanan Stry- 18 Birchall, J (2001) Organising Workers in the Informal jan. Sector: a strategy for trade union-cooperative action, Geneva: ILO 19 Op cit, p19-21 62 20 Rajagopalan, S (2003) Tribal Cooperatives in India, 37 Philp, K (2004) ‘The challenges of co-operative New Delhi: ILO/INDISCO membership, social cohesion and globalisasation’ in 21 Birchall, 2004 Co-operatives and the Millennium Fairbairn, B and Russell, N (eds) Co-operative Development Goals, Geneva: ILO Membership and Globalisation, Saskatchewan: Centre for 22 See Birchall, 1997 p222-4 for evidence the Study of Co-operatives, p68

23 See Birchall, 2003, case study 3 38 Fairbairn, B (2004) ‘Cohesion, adhesion and 24 Nippierd, A-B and Holmgren, C (2002) Legal identities in co-operatives’, in Fairbairn, B and Russell, Constraints to Women’s Participation in Cooperatives, N (eds) Co-operative Membership and Globalisation, Geneva: ILO Saskatchewan: Centre for the Study of Co-operatives, 25 Birchall, 1997, p224 p19

26 Birchall, J and Simmons, R (2001) ‘Member 39 Spear, R (2000) ‘Overview; the Reasserting the Co- participation in mutuals: a theoretical model’, in Birchall (ed) The New Mutualism in Public Policy, operative Advantage Project’, Journal of Co-operative London: Routledge Studies 33.2, 95-101, p100

27 Rajaguru, R (1006) Survival in the Open Market, New 40 Cook, J, Deakin, S, Michie, J and Nash, D (2003) Delhi, ICA; Fischer, I, Hardy, L, Ish, D and MacPherson, I (1999) The SANASA Model: Co-operative Trust Rewards: realising the mutual advantage, London: development through micro-finance, Saskatchewan, Mutuo Centre for the Study of Co-operatives 41 Johanisova, 2005 op cit 28 Briscoe, R and Ward, M (2005) Helping Ourselves: Success stories in co-operative business and social enter- 42 Birchall, 2003, 2004 op cit prise, Cork: Oak Tree Press 29 Birchall, 2004 43 Cote, D (2000) ‘Co-operatives and the new millen- nium: the emergence of a new paradigm’, in Fairbairn, 30 Birchall, 1994, ch.6 B, MacPherson, I and Russell, N (eds) Canadian Co- 31 See Birchall, 2004, 57-59; Pollet, I and Develtere, P operatives in the Year 2000, Saskatchewan: Centre for (2003) Development Cooperation: How Cooperatives Cope: a survey of major cooperative development agencies, the Study of Co-operatives Leuven, Hoger instituut voor de arbeid 44 Brown, L (2004) ‘Innovations in co-operative 32 Birchall, J (2000) The Lanica Affair: an attempted marketing and communications’, in Fairbairn, B and takeover of a consumer co-operative society’, Journal of Co-operative Studies, 31.2, 1998 pp.15-32 Russell, N (eds) Co-operative Membership and Globalisation, Saskatchewan: Centre for the Study of 33 Davis, P (2004) Human Resource Management in Co-operatives, p187 Cooperatives, Geneva: ILO 34 Birchall, 2004 op cit 45 Webb, T (2000) ‘Marketing co-operation in a global society’, in Fairbairn, B, MacPherson, I and Russell, N 35 Taimni, K (2001) Cooperatives in Asia: from reform to reconstruction, Geneva: ILO (eds) Canadian Co-operatives in the Year 2000, Saskatchewan: Centre for the Study of Co-operatives 36 Verhagen, K, Enarsson, S, Olney, G and Kadasia, B (1998) A Report on Status of Rural Savings and Credit Co- operatives in Kenya, Geneva: ICA

63 Colombia, the host for the International Co-operative Alliance’s Global Assembly – ICA

I. General information on tory and divides the country’s several Colombia regions. These are: the Andean zone, whose main cities include Bogotá, the 1. Geography capital of the Republic, Medellín, Cali, Popayán, Pasto, Tunja, Manizales, Colombia lies on the northwestern tip Pereira, Armenia, Cúcuta, Bucara- of South America and shares its borders manga, Neiva and Ibagué; the with Panama, Venezuela, Brazil, Peru and Ecuador. It occupies 1,038,700 Caribbean region, in which lie Carta- square kilometres and is gena, Santa Marta, Barranquilla, Rio- the fourth largest country in South America after Brazil, Argentina and Peru. It has 2,900 kilome- tres of coastline, 1,600 of which face the Caribbean Sea and the remaining 1,300 lie on the Pacific Ocean. Besides its conti- nental territory, Colombia also has various islands, the most worthy of men- tion being the archipelago of San Andrés y Providen- cia in the Caribbean Sea and Gorgona, Gorgonilla and Malpelo in the Pacific. The Andes mountain chain divides into three separate branches upon entering Colombian terri-

64 hacha, Valledupar, Sincelejo, Montería 6 °C for every 1,000 meters of eleva- and San Andrés y Providencia; the tion. At sea level, the temperature Pacific region, with the cities of oscillates close to 30 °C. Quibdó, Buenaventura and Tumaco; Even though there are no seasons in and the Amazonia-Orinoquia region Colombia and the climate in each with the population centers of Villavi- region remains relatively stable cencio, Florencia and Leticia. throughout the year, there are slight Besides the Western, Central and East- variations due to the dry and rainy ern mountain ranges, there are other seasons. The dry season lasts from independent massifs. The main ones December to January and from July to are the Sierra Nevada in Santa Marta, August and the rainy season lasts from on the Caribbean seaboard, and the April until May and from October to Serranía de la Macarena in the east. November, although these can deviate The rest of the country is made up of significantly. lowlands: to the north the Caribbean 3. Population plains, to the west the coastal and agrarian Pacific strip and to the east Colombia has an approximate popula- the flatlands of Orinoquía and the tion of 44 million people, of which 74% tropical jungles of the Amazonia. live in the cities and the rest in rural areas. Women make up 51% of the Coffee is the principal crop of the high- Colombian population. The most lands (Colombia is the world’s second densely populated region is the largest producer). 95% of the world’s Andean one, since 75% of the national production of emeralds is extracted population is concentrated here. It is from the rich subsoil in addition to followed by the Caribbean coast with sizeable quantities of gold, silver, plat- 21%, while only 4% of Colombians live inum, copper, uranium and other min- in the vast regions of Orinoquia and erals. With the deposits discovered in Amazonia. the Guajira peninsula, Colombia pos- sesses the greatest carboniferous Bogotá, situated in the geographic cen- tre of the country in the Andean region reserves in Latin America. is 2,630 metres above sea level and has a 2. Climate daily average temperature between 12 Even though Colombia lies in the °C and 20 °C. It is home to 7 million equatorial zone, the Andes mountain people, making it the largest urban cen- range confers upon the country a great tre of the country, followed by Medellín in the Northeast with 3.0 million, Cali – variety in topography which ranges in the Southeast – with 2.8 million and from humid jungles and tropical Barranquilla and Cartagena – on the plains to barrens and regions of per- Caribbean coast – with 1.8 and close to petual snowfall. The climactic varia- 1.0 million people, respectively. tions therefore do not obey the sea- sons, but depend on the altitude, since The growth rate of the population is the temperature drops approximately 1.9% and it is estimated that by 2015, the 65 population will have reached 52.6 mil- dous diversity of agricultural prod- lion people. The life expectancy upon ucts. Coffee, the main agricultural birth is, on average, 72 years (69 for men and export product, is grown in the and 75 for women). The child morbidity temperate zones of the mountainsides. rate is 25 per thousand. 91% of the pop- Citric and other varieties of fruit, as ulation has access to drinkable water well as tomato, jute, maize, beans, and 92% of the population is literate. yucca and cereals are also grown in The majority of the Colombian popula- these temperate regions. Cotton, tion is half-caste, a mix between banana, rice, sugarcane, African palm, Spaniards and their descendants and cocoa, tobacco, sorghum, soy and the indigenous races that inhabited the countless other tropical fruits like region before the colonisation and the pineapple, papaya, coconut and blacks that were originally brought as mango are grown in the warmer slaves. This racial diversity contributes regions. Colombia exports a number to giving Colombia an extraordinary of agricultural products, which richness of folkloric and cultural tradi- tions, as well as cuisines. include, besides coffee, banana and other exotic fruits. 4. Administrative and political system There are vast cattle-raising zones, mostly in the plains of the Caribbean Colombia is a democratic state built coast and in the Eastern plains, as well under the framework of a unitarian as in the Bogotá savannah which is rife republic with a presidential govern- ment system. The Parliament is made with herds of milk cows. The coasts of up of two houses, the Senate (102 both oceans and the extensive pluvial members) and the Chamber of Repre- network provide vast fishing resources sentatives (161 members). The highest as well. judicial power lies with the Constitu- Mining is an economic sector of great tional Court, the Supreme Court of Jus- importance and one of the main export tice and the Council of State. items. Worthy of mention are the car- The President of the Republic is boniferous reserves in the North and elected to serve terms of 4 years. the oil deposits in the East. Colombia Álvaro Uribe Vélez is the current Pres- is the world’s foremost producer of ident of Colombia. excellent-quality emeralds and also Colombia is divided administratively occupies an important place in the pro- into 32 departments (states) and a Cap- duction of platinum, gold and silver. ital District (Bogotá). There are a total of 1,098 municipalities. The most noteworthy industries in the country are: clothing and textiles, iron 5. Economy and steel, chemical, petrochemical, The variety of topographic and climac- plastic, leather, graphic arts and food tic ambiences also results in a tremen- and beverage. 66 II. Macroeconomic For the year 2005, the goal established by the Bank of the Republic is fixed data on the country between 4.5% and 5.5%, quite in keep- 1. Inflation ing with the current price situation in the economy. The consumer price index, CPI, which reflects inflationary behaviour, experi- In 2004, the American dollar experi- enced an increment of 5.5% in 2004, a enced a 13.98% devaluation with number that had not been registered respect to the Colombian peso, with a since 1955 when this same index representative market exchange rate reached 2.03%. The goal set forth by on December 31st 2004 of 2389.75 the Bank of the Republic was met since pesos per dollar as opposed to the it was fixed between 5% and 6%, 2778.21 pesos per dollar that was regis- demonstrating that the economy in tered at the close of 2003. matters of prices is very stable and that 2. Production such aspects as the flow of remittances, the rise in the price of gasoline or the The observed growth of the Colom- national transportation strike were not bian economy during 2004 (3.96%) was able to deviate the goal set forth by the similar to that of 2003, during which a government. variation of 4.02% was registered. In earlier years, the changes in GDP were: The transportation sector registered 0.57% in 1998, -4.20% in 1999, 2.92% in the highest increases in 2004, with a 2000, 1.47% in 2001 and 1.93% in 2002. variation of 8.06%, reflecting the rise in The accumulated growth of GDP in the cost of fuels, followed by the health the fourth quarter of 2004 was 4.43% sector with a 6.99% increase and lastly with respect to the same period in 2003 the education sector with a rise of and 1.89% with respect to the quarter 5.69%, with a noticeable increase in the immediately preceding it. price of textbooks of 11.77%. The price of food experienced a rise of 5.43%. When breaking down the results of

12 month CPI variation

67 GDP in 2004 by sectors, the following since for 2003 it was registered at variations presented themselves: agri- 14.74%. culture, silviculture, hunting and fish- It is worth mentioning that the behav- ing 2.09%; mines and quarries exploitation 2.82%; gas, electricity and iour of the unemployment rate during water 2.91%; manufacturing industry 2004 showed a clear tendency to 4.77%; construction 10.65%; com- decrease not only in the national total merce, repair services, restaurants and but also in the metropolitan areas’ rate. hotels 5.62%; transport, storage and Thus at the end of 2004 there were communications 5.05%; financial 2,449,297 unemployed people in establishments, insurance, real estate Colombia, as opposed to the 2,549,858 and company services 4.33%; social, unemployed at the close of 2003, communal and personal services which translates into 100,561 new jobs. 2.76%, all with respect to the total for the year 2003. The national underemployment rate also showed a slight decrease as it 3. Employment moved from 31.87% in 2003 to 30.59% The unemployment rate as of Decem- in 2004; that is to say, at the end of 2004 ber 2004 was 12.15% on a national level there were 6,166,908 underemployed and 12.96% for the thirteen metropoli- people in contrast to the 6,587,663 of tan areas. If we compare these figures only 12 months before. with those of last year one can appreci- 4. Interest rates ate a slight decrease in the national unemployment rate since this same The year 2004 exhibited very stable figure in 2003 was registered at behaviour, mostly due to monetary 12.34%. For the thirteen metropolitan policy, which in the face of weak areas the decrease in the national inflationary pressures did not take unemployment rate was even greater, any strong contractionary measures.

National Unemployment Rate 2004

18.00 % 17.05% 17.00 % 15.37% 16.00 % 14 .71% 15.00 % 13.59% 13.62% 14.06% 14.00 % 13.14% 12.93% 12.47% 12.40% 13.00 % 12.15 % 11.70% 12.00 %

11.00 %

10.00 % January February March April May June July August September October November December

Source: Dane

68 DTF Evolution 2004

DTF Evolution 2004 8.00%

7.92% 7.90%

7.80%

7.71% 7.70%

7.60% Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

The DTF reference interest rate for sav- The financial intermediary margin ings started out the year at 7.92% and remained stable and due to the good reached its peak during the second state of liquidity and the brisk rhythm week of March when it was registered of economic growth the financial insti- at 8.02%, and later it oscillated around tutions consolidated a very good year. 7.80% to finally reach a minimum of 5. Stock market 7.61% during the second week of Octo- ber. At the end of the year, the repre- The General Index of the Colombian sentative interest rate for savings for Stock Market (IGBC) reflected a good the various financial institutions was year for stock holders, making it one of 7.71%. the most profitable stock markets in the world. In 2004, the value of the The active interest rates or the interest IGBC reached 86.03%, illustrating the rates for loans in the financial sector internal economic stability, the social exhibited stability. The average con- security policy and the decrease in risk sumption rate started out the year at in the country. 26.69% and finalised at 24.98% and the common credit rate began at 18.03% The titles that represent public debt, and ended at 16.67%. whether external or internal – TES, experienced a complicated year at the The rate at which banks loan each end of April, when the uncertainty other money presented a very stable, about the United States’ economic downward behaviour as it closed at measures generated speculation and 6.5% as compared to the 7.4% from the its consequent effects on the prices of beginning of the year. From the point these emerging countries’ titles, espe- of view of liquidity, this reflects the cially in Brazil, which is the bench- good shape that the financial institu- mark for foreign investors in this type tions are in, a fact that is confirmed of instrument. In the end, the northern when one observes the monetary country’s measures did not turn out to aggregates. be drastic and the prices of these titles 69 recovered at the end of the year in and the countries of the European keeping with the inverse correlation Union, which participated in 13.9% of that has existed between the behaviour export transactions. of the price of the debts and the Amer- ican currency. III. The co-operative 6. Exports movement in Colombia According to the export declarations processed by the DANE during 2004, 1. The judicial regulation of the co- the external sales of the country operative movement in Colombia. increased by 25.9% relative to the sales Seven decades of development of 2003, going from $13.092 million The first manifestations of the co-oper- USD (FOB) to $16.483 USD (FOB). ative movement in Colombia came This increase is due mostly to the about with the dawn of the 20th cen- 25.8% increment in the exports of non- tury, promoted under the influence, in traditional products which alone con- part, of influential political and social tributed 13.9 percent points to the total leaders who learned about the model in Europe and in Canada. It was also variation in exports. This result has promoted through the social action of come about because of the heightened the Catholic Church that helped sales in vehicles and parts, clothing, organise mutual help organisations plastic materials, foodstuffs, beverages among the most popular sectors of the and tobacco. community. Without including the export of gold In a speech about democratic socialism and emeralds in the non-traditional by Rafael Uribe Uribe, Colombian gen- category, a 29.0% increase was eral and statesman, recorded in the observed when comparing 2004 to first number of the newspaper El Lib- 2003. eral that began circulation in April By country, the greatest increment was 1911, he pointed out that, “instead of registered in the quantity of products the monarchical and paternalistic form sold to Venezuela with a 130.9% of production, there will come a day increase. According to tariff records, when the co-operative type, more effi- this increase was due in large part by cient and just in terms of giving the the increased sales of vehicles and workers, that is, those that perform the parts and live animals. job and create the product, the propor- tional part that corresponds to them.” The United States is the main destina- tion of Colombian exports, since it Five years later, in 1916, during the received 39.5% of total exports during government headed by José Vicente 2004 and represented a monetary Concha, that his Secretary of Agricul- value of $6.504 million USD (FOB). It ture and Commerce, Benjamín Herrera was followed by the member countries – who would later be President of of the Andean community with 19.4% Colombia – presented before the Con- 70 gress of the Republic the first legisla- wanting to update co-operative legis- tive project aimed at regulating the co- lation, expedited Decree 1598, through operative model. which it introduced, especially for sav- ings and credit co-operatives, the con- But it was only in 1931 with the pas- cept of specialisation and allowed said sage of Law 134 of that year that the entities to hold savings from its mem- co-operative movement in Colombia, bers and from third parties without whose presence was yet weak in the any restriction. However, the level of economic and social environment of co-operative entrepreneurial develop- the country, had its first judicial frame- ment at the time did not allow for an work of note in the national judicial ample development in this activity, arena. This law came about more out and thus it remained a marginalised of the interest of the government and industry of only a few co-operatives the support of the Congress at the time which had taken up this activity. than from a real need in the sector, which, as was already mentioned, was The said Decree created the National barely beginning to show itself as an Co-operative Superintendence, an eventual alternative to communities. autonomous branch in charge of the Later on, Law 138 of 1936 introduced specialised supervision of co-opera- some modifications to Law 134 and tives, and functioned as such until expedited some regulatory decrees 1982, when its structure was reformed that began to create the judicial frame- through Law 24 of that year, giving work of the Colombian co-operative way to the creation of the National movement. Department of Co-operative Adminis- tration – Dancoop. This was a govern- This legal framework served as the ment branch of technical character and basis for the promotion and the accept- of similar rank to a ministry, to which ance of the co-operative as an instru- were ascribed the functions of vigi- ment of social and economic develop- lance and control, on the one hand, ment, of special interest among the and of promotion and development, less-developed communities and with on the other. Such an arrangement the impetus of social leaders linked to functioned until August 1998, when a the Catholic Church, the workers’ new reform was produced that modi- associations and the first trade unions fied the public institutionalism related that began to surface in the 1940s. to the sector, as we shall see later on. Around this time, the national govern- In 1988, with a report by the current ment, which was interested in the pro- President of Colombia, Álvaro Uribe motion of co-operatives, created a Vélez, who was then functioning as a department in charge of their supervi- Senator of the Republic, the national sion that was ascribed to the then Sec- government approved Law 79 of that retary of Development and Industry, year that updated co-operative legisla- later known as the Secretary of Labour. tion. This law, with some subsequent In 1963, the national government, adjustments, continues to be the judi- 71 cial framework for the Colombian co- and the creation of an autonomous operative movement. entity specialised in seeing to these last functions has been an important step As a relevant theme within this law, towards the process of growth in the one can mention the recognition of co-operative sector, which today can savings and credit co-operatives, as count on specialised and technical well as integration organisations mechanisms of supervision (illustrated which were developing such activities, by a growing tendency to formalise the as financial institutions. It is important sector), the presentation of statistical to mention that for the first time in the and financial information and the con- history of the country the organisation trol of associative figures. All of these of financial institutions under the co- benefit the more than 3 million mem- operative judicial model, in all its dif- bers which the system has to this day. ferent modalities, was allowed. This led, in practical terms and during the In recognition of the importance and early 90’s, towards the creation of uniqueness of judicially organising co- three co-operative banks. operatives in Colombia, the Political Constitution adopted in 1991 created a Law 454 was passed in 1998 and estab- special chapter that recognises the lished a new public and institutional social and associative forms of prop- map for the sector, reforming the Dan- erty, of which the co-operative model coop and creating the National Depart- is the most widely recognised and ment of the Social Economy – Danso- applied. In effect, the Magna Carta cial, a branch in charge of the explicitly mentions the promotion of promotion and the development of co- said associative forms as a means of operatives. It also created the Superin- democratising property, of guarantee- tendence of the Social Economy, which ing access to healthcare services to the is responsible for the functions of vigi- community, of executing housing pro- lance and control and also opened the grammes of a social nature and of pro- possibility of the creation of a Co-oper- moting the access of agrarian workers ative Entities Fund of Guarantees, a to land and determines that, as a con- proposal that was made reality months stitutional mandate, it is the job of the later with the creation of Fogacoop. government to strengthen this type of Said law also saw to the regulation of organisations and to promote their the financial activities of co-operatives, commercial development. which were severely affected by the Furthermore, the current National profound crisis that the sector experi- Development Plan established a spe- enced during the years 1996 and 1997. cial paragraph on the promotion and The separation of the state’s promotion the development of co-operativism as and development functions from its a necessary instrument in the search vigilance and control ones, which for for social equity, a cornerstone of the two decades had been under the con- current government’s policies. Said trol of a single state branch – Dancoop, guideline suggests, among other pro- 72 posals, that the government take into essence of co-operative and union inte- account the ILO’s Recommendation gration and calls for a proper dynamic 193 from 2002 about the promotion of form, with the presence of permanent co-operatives all over the world. and multiple fronts of activity. The normative, doctrinal and jurispru- Thus the importance of a strong scheme dential development of co-operative of integration that picks up the diverse matters in Colombia, as well as the expressions of the co-operative move- state’s supervision structures, are con- ment and that backs up the actions sidered important reference points for entrusted to the union leadership, be it other countries in the region, in which, at a local or at a national level. at the same time, the growth and com- The co-operative integration process in mercial consolidation of our organisa- Colombia has had an important and tions are duly recognised. productive impulse for many years 2. The integration of unions as a now, having made concrete the Agree- support for sectorial consolidation ment of Integration subscribed to in 2001 in Cartagena, which translates Social and union integration points to itself into the participation of the 20 the association of efforts directed existing Regional Associations of towards unifying the co-operative Colombia in the workings of the Co- movement’s defensive and representa- operative Confederation of Colombia – tive actions on a national and interna- Confecoop, and also in the strengthen- tional level. To such ends, base or first ing of the regional presence and com- tier co-operatives will be able to associ- munications, the widening of the ate themselves into second tier organi- member base and the positioning of sations of a national or regional charac- the sector as a true actor in the socio- ter and these in turn will be able to economic process. create third tier organisations of an associative nature. Confecoop has retaken the spaces of sectorial leadership and has become a Through these blueprints of integration, permanent guest in the debates relat- the local, regional and national co-oper- ing to the subjects of interest to the sec- ative movements can express before the tor, which are made known to our many economic, social, political, public affiliates through various channels and and private actors their sectorial con- communications strategies. cerns and be able to forward any actions that represent their interests. The per- Of course, the reach of the union man- manent communication with the vari- agement covers not only our affiliates, ous instances of the Executive and Judi- who also benefit from the privilege of cial powers, the defensive actions before being integrated into our entity, but the jurisdictional branch, the interrela- also, in many cases, to the whole sector tions with the various production since the interest in the defense of unions and a permanent voice for the unions is born from a desire for the movement, are, among others, the general good. 73 Having mentioned this, we always call ative principle states that, “co-opera- out to those who are still not a part of tives serve their members more effi- the process of integration, in keeping ciently and strengthen the co- opera- with co-operative principles and with tive movement by working together the benefits of a plan for integration, be through local, national, regional and it economic or union-based, to put it international structures.” into practice not only to strengthen the movement but to also be able to count This doctrinarian principle was insti- on an efficient instrument, within each tuted by Colombian laws through the and every one of your co-operative fifth numeral of the fifth article of Law organisations, aimed at the construc- 179 of 1988, which states as one of the tion of an economic model with a requirements that a co-operative must recognisable influence and social meet that “it integrate itself socially impact that allows the promotion of and economically into the co-operative the co-operative model as a real instru- sector”, a requirement that was later ment of development and as an alter- adopted by Law 454 of 1998 to apply to native to overcoming the asymmetries all of the social economy’s entities. of a society like Colombia’s. Economic integration seeks the associ- The International Co-operative Alliance ation of co-operatives amongst each – ICA, has recognised the national co- other so that they may better meet operative movement’s leadership, the their economic goals. It is crystallised active participation under the ICA’s through the creation of second tier higher instances of integration, the organisations of a co-operative charac- growing efforts to unify all defensive ter, be they of a national, regional or and representative actions, the suc- local nature, whose fundamental pur- cessful and commercial developments pose is to support and complement the that today’s Colombian co-operative objectives of the base co-operatives movement demonstrates in several that created it, keeping in mind the fields, the movement’s importance in specialty of their social objective in any national figures and its capacity for given branch or activity. efficient communication with both public and private sectors. The ICA, in Taking advantage of economies of its Oslo General Assembly, unani- scale, this mechanism of integration mously approved the celebration of allows co-operatives to improve their the next co-operative world forum in working environment, to expand their the city of Cartagena de Indias in Sep- access to new markets, to extend the tember 2005. coverage of the productive chain to which the integrated entities belong, to 3. Economic integration. A co-opera- take advantage of the installed techno- tive principle and a commercial logical infrastructure and to strengthen practice in the face of market realities and make more efficient administrative Cooperation between co-operatives, processes so as to obtain noticeable the sixth universally adopted co-oper- results in management. 74 Co-operative entities like La Equidad the large commercial chains. There- de Seguros, with a social base of 1270 fore, a greater comprehension and pro- associated co-operatives, Saludcoop, motion of the benefits of this co-opera- the first health service provider enter- tive structure are needed, especially in prise, with a greater coverage than the times like these when the process of state’s own Social Security, Asegu- the globalisation of economies and of radora Solidaria de Colombia and their markets forces a greater degree of Coomeva, ranked among the most efficiency and competitiveness. important companies in the country, 4. The socio-economic importance of serve as a practical example to high- co-operativism today light the benefits of this mechanism of cooperation among co-operatives. As of December 31st 2004, there were They develop various business fronts 5,189 co-operatives that generated throughout dynamic, specialised and 140,394 direct jobs in Colombia and financially solid business groups. had 3,002, 958 members. These co- operatives, located in 900 of the 1,098 Another co-operative model of inte- municipalities of Colombia, reported gration is the one developed by assets of $4.636 million USD. Copidrogas 35 years ago in which small proprietors of 2663 pharmacies If one takes into account the geographic and local drug stores associate them- distribution of the members of the selves with the co-operative to take social economic sector by location, one advantage of economies of scale and to can observe that Bogotá, Antioquia, remain in and colonise new segments Valle and Santander – the main nuclei of service coverage under the condi- of development in the country – gather tions of an absolutely competitive mar- around 80% of the assets, 83% of the lia- ket in the face of large chains, multina- bilities, 74% of the patrimony, 69% of tionals in many cases, that operate the income and 79% of the surplus. within this segment of the market. One can surmise the high participation Coratiendas has been operating an that the co-operative movement has identical model for close to three within the social economic sector and decades, gathering small shopkeepers how the movement has been growing from the neighborhoods of Bogotá and to become one of the main actors of the the municipalities located in its area of national economy, participating in the influence. majority of the branches of economic activity and reaching even the most In today’s modern world it is impera- remote rural areas of the country. tive for small businesses to create new co-operative enterprises under these The contributions that the co-operative guidelines, to share logistic and sys- model makes to the country from a temic infrastructures and to standard- socio-political and macroeconomic ise administrative procedures if they point of view are also important given intend to remain in the market without that it increases employment levels, falling under the sphere of influence of raises standards of living, promotes a 75 fairer distribution of income, decreases This behavior demonstrates the trust the level of poverty and helps with the that people put in the model, besides processes of education. It does this all an important culture of information based on a doctrine that has proved that goes hand in hand with the time and again how organisations greater levels of education and tech- based on solidarity can function under nology in co-operative enterprises. any current of economic thought and can, in certain circumstances, solve Co-operative Sector some of the necessities which are not Evolution in the Number of Entities taken care of under the economic 6,000 model of a given country or region. 5,189 5,000 4,846 4,195 Given the economic conditions of the 4,000 3,472 3,517 country and of the entities that make up 3,000 the social economy, 52.79% of businesses 2,000 1,000 are micro-businesses, 35.97% are small - 2000 2001 2002 2003 2004 businesses, 8.71% are medium busi- Source: Confecoop nesses and 2.53% are large businesses, it is easy to see the potential for social and Co-operative Sector economic growth in the country; all Evolution of Assets large companies at some point of their millions USD existences started out as micro or small 5,000 4,636 businesses, and even though it may be 4,500 4,000 true that in their stages of growth some 3,500 3,455 2,853 will not be able to meet their goals, the 3,000 2,634 model contributes toward the creation 2,500 2,141 2,000 and promotion of productive units, a 1,500 process that cannot be promoted in its 1,000 1,500 totality by the public administration of a - 2000 2001 2002 2003 2004 developing country like ours. Source: Confecoop 5. Progress over the last five years Co-operative Sector With respect to the number of co-oper- Evolution of Liabilities atives, at the end of 2004 their number escalated to 5,189, that is to say, there millions USD 3,000 were 343 new co-operatives with 2,753 2,500 respect to 2003, an increment that rep- 2,064 2,000 1,699 resents a 7% increase in the number of 1,517 1,500 co-operatives. 1,107 1,000 During the last five years 1,717 new co- 1,500 operative companies were registered, - which in percent terms is equal to a 2000 2001 2002 2003 2004 growth of 49.45%. Source: Confecoop 76 As one can surmise from the graph of five of which are financial co-opera- the volume of co-operative assets, tives and one large scale co-operative there was a variation last year of $1.180 organisation of financial character; and million USD (34.16%) and of $2.495 219 supervised by the Superinten- million USD for the last five years dence of the Social Economy of which (116.52%). The period from 2003-2004 124 are co-operatives specialised in presents the greatest variation. savings and credit and 95 are integral co-operatives with multiple activities Throughout last year, the co-operative and with savings and credit functions. sector’s liabilities grew by 33.41%, that is to say, by $690 million USD, and The assets of the co-operative financial during the last five years by 148.83% sector totalled $1.985 million USD at the which is equal to $1.647 million USD. close of 2004. This figure shows an annual increase of 32.41% with respect The patrimonial strengthening of the to the $1.499 million USD reported in co-operative sector has been likewise December 2003. This volume represents important, coming to a total of $1.882 4.13% of the financial sector supervised million USD at the end of 2004, an by the Banking Superintendence. increase of 35.28% ($491 million USD) with respect to 2003. For the period in Co-operative Sector question, the total increase is equal to Patrimony Evolution

$848 million USD (81.95%). $millions USD 2,000 1,882 The co-operative sector’s income, 1,800 which represents 5.20% of national 1,600 1,400 1,391 production, shows an annual growth 1,117 1,154 1,200 1,035 rate of 29.15% ($1.257 million USD) at 1,000 800 the end of 2004. During the last five 600 years this increase has been in the 400 200 order of $2.973 million USD (114.44%). - 2000 2001 2002 2003 2004 3. Analysis by sectors Source: Confecoop

3.1 Financial co-operative sector Co-operative Sector Income Evolution Consolidating the information on those co-operative entities that per- $millions USD 6,000 form a financial role, supervised by 5,571 5,000 both the Banking Superintendence and 4,313 4,000 the Superintendence of the Social 3,266 2,893 Economy, the following information is 3,000 2,598 obtained: 2,000 1,000 The total number of co-operative enti- - ties in the sample was 225, six super- 2000 2001 2002 2003 2004 vised by the Banking Superintendence, Source: Confecoop 77 As the main asset of those co-opera- terms is equal to $6.6 million USD of tives which perform a financial activ- resources. This important increase in ity, the credit portfolio in gross terms the micro-credit portfolio is funda- reached $1.313 million USD at the mental to improving the population’s close of 2004 as opposed to the $944 standards of living and the distribu- million USD from 2003, which repre- tion of income since financing new sents an annual growth rate of 39.07%, productive projects for micro, small higher than the gross portfolio growth and medium businesses strengthens of the financial sector which was in the the productive apparatus of the coun- order of 30.88% annually. try and generates higher levels of pro- duction and employment. These portfolio figures make up 5.62% of the financial sector’s portfolio, Commercial, consumption and hous- which at the end of 2004 ascended to a ing portfolios also experienced impor- total of $23.379 million USD. tant increases of 35.7%, 17.5% and 18.0% respectively. The type of portfolio that presents the greatest dynamic character was that of The portfolio quality index, given as the micro-credit with an annual the gross proportion of the portfolio growth of 143.2%, which in absolute which presents maturities longer than 90 days, is 3.89%, quite close to the Co-operative Sector’s index presented by the traditional Gross Portfolio growth financial sector which was 3.31%.

$ millions USD Deposits are the principal variable 72.1% 1,313 1,400.00 within financial co-operatives’ liabili- 1,200.00 933 ties, they represent 55.61% of total liabil- 1,000.00 763 800.00 ities, which translates into a low degree 600.00 of leverage for this variable, in keeping 400.00 with the established policies of the co- 200.00 Dec. 2002 Dec. 2003 Dec. 2004 operative sector as to holding resources. Source: Confecoop Financial co-operatives’ main leverage is upheld mainly through capital of a Co-operative Financial Sector social contributive type. Growth by Portfolio Type 2003-2004 These deposits, however, have shown

160.00% a growth of 36.67% in annual terms 140.00% 143.2% and reached $695 million USD by the 120.00% end of 2004, which is equal to 2.19% of 100.00% the deposits in the financial sector. 80.00% 60.00% This is a reflection of the trust that

40.00% 35.7% associates, and the general public, 20.00% 17.5% 18.0% place on the co-operative financial 0.00% CONSUMPTION HOUSING COMERCIAL MICRO-CREDIT model, which offers a diverse array of Source: Confecoop savings alternatives. 78 With $735 million USD at the close of Co-operative Insurance Sector 2004, and with an annual growth rate Principal Variable Behavior of 33.02%, financial co-operatives’ pat- $millions USD 2003 2004 rimony is the variable that in terms of 180.0 equivalence with the total financial 160.0 154.4 140.0 sector presents the highest value, 120.0 117.6 107.2 which is 12.62% of the total patrimony. 100.0 81.9 80.0 70.0 The surplus for co-operatives engaged 60.0 51.2 37.1 in financial activities at the end of 2004 40.0 30.7 20.0 increased to $49 million USD, which is - 7.7 7.5 equal to 4% of the total utilities of the ASSETS LIABILITIES PATRIMONY INCOME SURPLUS financial sector. Source: Confecoop 3.2 Insurance co-operative sector The insurance co-operative sector Insurance co-operatives’ assets at the experienced a favorable variance in close of 2004 escalated to $107 million income at the end of 2004 with respect USD, a figure that is 30.86% greater to 2003 since there was a 31.22% than the one registered at the end of increase, leading to a total of $154 mil- 2003, which saw these companies’ lion USD, a figure that is $37 million assets total $82 million USD. This vol- USD higher than the one registered at ume of assets over the total Colombian the close of 2003. insurance sector’s represents 3.62% in the case of companies dedicated to In the case of surplus, one can notice a general insurance, of which there are decrease of 2.27% when compared to 25 (2 are co-operatives) and 1.20% in the results of 2003, closing out the year the case of the 21 companies which are with $7.5 million USD in December of dedicated to life insurance (1 is a co- 2004. At the end of 2004, the profitabil- operative). ity indicators of general insurance co- operatives with respect to their assets Insurance co-operatives’ liabilities at and their patrimonies were 8.74% the close of 2004 presented a volume of (ROA) and 22.63% (ROE) respectively, $70 million USD, and when compared beating the rest of the general insur- with the $51 million USD of 2003 gives ance companies’ who registered for a total annual growth of 36.81%. Co- these same indicators values of 4.52% operatives make up 3.25% of the total (ROA) and 14.23% (ROE). general insurance sector, and 1.19% of all life insurance companies. For the co-operative life insurance sec- tor the profitability over assets (ROA) Insurance co-operatives’ patrimonies reached 1.90% and profitability over grew 20.94% from 2003 to 2004, total- patrimony (ROE) was registered at ing $37 million USD, a figure which 8.29%. The total amount of debt until represents 4.39% of general insurers’ 2004 reached 77.08%. total and 1.21% of the life insurance industry’s. Investment is the single most impor- 79 tant variable within the asset structure, lion USD demonstrates a variation of climbing in 2004 to a total of $60.6 mil- 4.94% with respect to the $650 million lion USD, or 56.57% of total assets. USD of the year before. On the other hand, the most important The surplus for workers’ co-operatives variables within the liability structure at the end of 2004 was $3 million USD, of the co-operative insurance sector are 18.92% greater than in 2003 when they technical insurance reserves and capi- totalled $2.5 million USD. talisation, which at the close of 2004 Workers’ co-operatives have 212,000 ascended to $57 million USD, equiva- associated workers and 35,000 employ- lent to 81.30% of their total liabilities. ees. 3.3 Workers’ co-operatives sector Looking at their contribution within the At the end of 2004, the 1,985 workers’ co-operative sector, however, it can be co-operatives reported assets of $215 seen that theirs assets contribute 4.64% million USD, $51 million USD more to the total assets of the co-operative than in 2003 when these assets were sector, 5.32% of liabilities, 3.64% of pat- counted at $164 million USD, which is rimony, 12.24% of income and 2.25% of equal to an annual growth of 30.92%. surplus. Workers’ co-operatives repre- sent 38.2% of the total number of enti- Liabilities reached a total value of $147 ties in the co-operative sector. million USD, that is to say, 26.16% more than at the end of the previous During the course of 2004, 247 new year when these climbed to a total of workers’ co-operatives were created in $116 million USD. Moreover, patri- Colombia, which translates into a growth of 14.21% in the number of mony at the close of 2004 was regis- enterprises of this nature. tered at $68.5 million USD, meaning an annual growth of 42.39% from the $48 3.4 Agricultural co-operative sector million USD from 2003. The co-operative entities of the agricul- The total income for 2004 of $682 mil- tural sector, whose number reaches

Workers’ Co-operatives Sector Agricultural Co-operatives Sector Behavior of Principal Variable Behavior of Principal Variables

$millions USD 2003 2004 $millions USD 2003 2004 800.0 2000.0 1800.0 1,797.2 700.0 681.9 649.8 1600.0 600.0 1400.0 1,393.2 500.0 1200.0 400.0 1000.0 800.0 300.0 215.1 600.0 490.9 395.0 200.0 164.3 146.6 400.0 116.2 266.3 215.0 179.9 224.6 100.0 48.1 68.5 200.0 - 2.5 3.0 - 3.1 2.5 ASSETS LIABILITIES PATRIMONY INCOME SURPLUS ASSETS LIABILITIES PATRIMONY INCOME SURPLUS Source: Confecoop Source: Confecoop 80 521, have assets of $491 million USD, moting entities (EPS), their assets grew liabilities of $266 million USD, patri- to $357 million USD, 25% greater than mony of $225 million USD, income of those registered in 2003 when they fig- $1.797 million USD and a surplus of ured at $287 million USD. Their liabil- $2.5 million USD. On the other hand, ities increased by 19% from last year these co-operatives associate 147,570 and reached $181 million USD. Their people and generate 10,500 jobs. level of patrimony at the end of the year was $143 million USD, 36% more Within the figures of the entire co- than in 2003 when it was at $106 mil- operative sector, the contribution of lion USD. These entities received the agricultural sector’s assets is incomes in 2004 of $1,016 million, 45% 10.59%, 9.67% of liabilities, 11.93% pat- more than the $700 million reported in rimony, 32.26% of income and 1.85% of 2003. For their part, these co-operative surplus. With respect to the number of entities registered $14 million USD of members and employees, it makes up surplus, generated close to 25,000 jobs 4.91% and 7.48%, respectively. and have a national coverage that As observed in the graph above, the includes 900 of the country’s munici- changes that the co-operative agricul- palities. tural sector experienced in the last year When comparing these figures to the were positive, taking into account the co-operative sector in general, one fact that their assets grew by 24.28%, finds that the assets make up 10% of their liabilities by 23.84%, their patri- total assets, 10% of liabilities, 9% of mony by 24.81% and their income by patrimony, 24% of income and 18% of 29.00%. employment. It is worth mentioning that the surplus If one compares the figures of the four category suffered a decrease of 20.50%, EPS co-operatives with those of the 15 mainly as a consequence of the revalu- health service companies, one finds ation phenomenon that directly that their assets have a participation of affected exporters’ incomes, an effect 59%, their liabilities of 53%, their patri- that becomes evident at the end of the mony of 74%, their income of 68% and year given that a large proportion of their surplus of 72%. agricultural co-operatives are involved in export activities. Furthermore, with respect to the number of compensated users, the 3.5 Co-operative health services health service providers’ sector sector reports a total of 11,329,815 people, of The social economic sector participates which 6,114,937 correspond to the co- in the Social Security and Health Sys- operative health service sector, or 54% tem with 4 EPS co-operatives, 9 ARS’s of the said population. of a co-operative and mutual nature As for the ARSs, a group made up of 9 and 64 IPS co-operatives. companies of a co-operative or mutual In what pertains to those health pro- nature (this report was able to obtain 81 EPS Co-operatives vs. Health Sector Evolution of Funerary Co-operatives

HEALTH SECTOR EPS COOPERATIVES $millions USD $millions USD 2003 2004

1,600 1,496 45 40.8 1,400 40

1,200 35 32.2 1,016 29.5 1,000 30 25 800 22.0 20 600 601 15 408 11.3 400 357 10 10.0 215 193 200 143 5 2.5 3.0 0 19 14 0 ASSETS LIABILITIES PATRIMONY INCOME SURPLUS ASSETS LIABILITIES PATRIMONY INCOME SURPLUS Source: EPS Co-operatives and ACEMI Source: Los Olivos the figures on only 8 of them), they a figure that is 26.69% higher than the reported that their assets increased to a one reported the year before. Liabili- total of $106 million USD, their liabili- ties demonstrated a growth equal to ties were $84 million USD, their patri- 13.55%, closing out 2004 at $11.3 mil- mony was $21 million USD and their lion USD. income totalled $331 million USD. The patrimony variable was the one Additionally, these companies gener- that presented the greatest annual ated 2,932 jobs and had 4,238,459 com- increase, 33.96%, to total $29.5 million pensated users. USD, which is $7.5 million USD more than at the end of 2003. According to the figures released by DANE in December of 2004, the total The surplus of funeral service co-oper- population of Colombia was 44,186,913 atives totalled $3 million USD, mean- people, from which one can deduce that ing it increased by an annual rate of 13.84% of Colombians are affiliated to a 33.96%, that is to say, $0.5 million USD co-operatively owned EPS and that more than at the end of 2003. 23.43% of Colombians benefit from the Today, these co-operative entities pro- services of a co-operative health tect 615,737 families, 14,255 more than provider, be it in a subsidised or con- last year, and thus the services ren- tributive regime. These conclusions dered have increased by an annual rate were drawn from the fact that the total of 1.95% to total 31,603. These co-oper- number of compensated users of EPS atives utilise an infrastructure which co-operatives increased to 6,114,937 includes 53 self-owned offices and 223 and those of the ARSs ascended to vigil palours. 4,238,459. Over the course of 2004, these entities 3.6 Funeral Service Sector welcomed 107 new direct collabora- The 16 entities that specialise in tors, with whom they reached a total funeral services registered total assets number of 780, a 15.90% increase from of $41 million USD in December 2004, the 2003 figure of 673 employees. 82 Transport Co-operative Sector The liabilities of this sub-sector closed Behavior of Principale Variables out at $130 million USD in 2004, which when compared to the $86 million $millions USD 2003 2004 350 USD of 2003, equals an annual growth 310 300 of 52%.

250 240 212 Transport co-operatives’ patrimony 200 grew by 52.4% during 2004 to reach a 150 130 110 total of $110 million USD, that is, $38 100 84 86 72 million USD more than in 2003. 50 - 4.6 6.4 During the year 2004, transport co- ASSETS LIABILITIES PATRIMONY INCOME SURPLUS Source: Confecoop operatives increased their incomes by $98 million USD to finish the year with $310 million USD, 46.10% more than in 3.7 Private security and vigilance co- 2003. operative sector In the same manner, the surplus of this The co-operative activity of private type of co-operative demonstrated an vigilance and security has been devel- annual evolution of 40%, or $1.8 mil- oped under the workers’ co-operatives lion USD more than in 2003, reaching a model. The figures on 46 of the 49 total of $6.4 million USD. companies supervised by the Private Transport co-operatives have close to Security and Vigilance Superinten- 7,200 members and generate around dence indicate that the assets of this 2,200 jobs. sub-sector had grown to $19 million USD by the end of 2004, their liabilities The participation that these co-opera- were at $6.76 million USD, their patri- tives enjoy within the national total is mony was registered at $12.24 million also of note, with assets of 5.19%, lia- USD, their income was $40.27 million bilities of 4.73%, patrimony of 5.86%, USD and their surplus was $0.54 mil- income of 5.56%, surplus of 4.82%, lion USD. These co-operatives have associates of 2.72% and employees of 11,493 members. 12.46%. 3.8 Transport co-operative sector 3.9 Co-operatives sector’s contribution to Formal Education programmes This type of co-operative entity, which (Preschool to University) is under the supervision of the Port and Transport Superintendence, expe- According to Law 788 of 2002 (Tax rienced quite a dynamic year in 2004. Reform) for the exemption of co-opera- The assets of these 655 entities tives from property taxes, these had to ascended to a total of $240 million invest 10% of their total surplus in for- USD, a figure that is 187% greater than mal education programmes during the the one reported in 2003 when 565 co- 2004 period, drawn from their social operatives presented assets of $84 mil- and education funds. To further this lion USD. goal, the Social Economy Superinten- 83 dence designed a statistical format for tive entities invested a total of $9.7 mil- gathering this information. lion USD from which 515,192 people benefited. According the analysed For the 2004 period, based on the sur- variables, the results of said invest- plus reported in 2003, 1,148 co-opera- ment were as follows:

NU MBE R % OF TOTAL % AVER AGE EDUCATIONALDU CATION AL DESTINATION BENEFICI BENEFICI RES OU RCES RES OU RCES BENEFIT ARIE ARIE S 1.REG ISTRATION FEESS 140,790 5,847,239 27.33% 60.07% 41.53

2.PE N SIONS 30,392 1,700,370 5.90 % 17.47% 55.95

3.TEX TBOO KS 70,326 290,823 13.65% 2.99 % 4.14

4.MA TER IALS 258,334 1,304,313 50.14% 13.40% 5.05

5.UN IFOR MS 6,268 33,305 1.22 % 0.34 % 5.31

6.TRANSPORTA TION 2,256 32,299 0.44 % 0.33 % 14.32

7. I C ETEX O R SE C EDUC ATION FUND 6,826 524,966 1.32 % 5.39 % 76.91

Gene ral 515,192 9,733,315 100.00 % 100.00 % 18.89

Total

NU MBE R % OF TOTAL % AVER AGE EDUCATIONAL LEVEL BENEFICI BENEFICI RES OU RCES RES OU RCES BENEFIT ARIE ARIE S 1.PR ESCHOOL S 9,271 329,305 1.80 % 3.38 % 35.52

2.MID D LE SCHO O L 206,815 2,445,607 40.14% 25.13% 11.83

3.HIGH SCHOOL 209,763 3,066,988 40.72% 31.51% 14.62

4.TEC HNIC AL 9,268 287,799 1.80 % 2.96 % 31.05

5.TEC HNOLOGIC AL 4,049 1,014,568 0.79 % 10.42% 250.57

6.UNI VERS ITY 73,462 2,256,044 14.26% 23.18% 30.71

7.PO ST-GRADU ATE 2,564 333,004 0.50 % 3.42 % 129.88

Gene ral total 515,192 9,733,315 100.00 % 100.00 % 18.89

NU MBE R % OF TOTAL % AVER AGE STRATUM BENEFICI BENEFICI RES OU RCES RES OU RCES BENEFIT ARIE ARIE S 1 S155,485 1,436,998 30.18% 14.76% 9.24

2 211,566 3,447,953 41.07% 35.42% 16.30

3 141,694 4,094,169 27.50% 42.06% 28.89

4 4,759 544,673 0.92 % 5.60 % 114.45

5 1,451 136,244 0.28 % 1.40 % 93.90

6 237 73,277 0.05 % 0.75 % 309.19

Gene ral total 515,192 9,733,315 100.00 % 100.00 % 18.89

84 ments of these Colombian entities. IV. Integration and These incidence tasks, based on the political incidence formulation of documents for the scrutiny of Congressmen, judicial 1. Political incidence in Colombia studies and an ample participation in co-operative forums, among others, The Colombian Co-operative Confed- have led to the promotion before ICA eration – Confecoop – has been pro- Americas of a project with similar moting for three years now a strategy characteristics for all the Parliamentar- aimed at consolidating the process of ians of the region. Such a project has the sector’s political incidence before had interesting developments, as we the state’s various instances of inter- shall soon discuss. locution that have a direct or indirect tie with the sector. 2. Working toward a parliamentarian support network in Latin America To this effect, the channels of interac- tion with public entities have been The Second Meeting of Latin American fine-tuned, making the Confederation Parliamentarians interested in the pro- an active institutional voice of the motion of the co-operative model took national co-operative movement, a place in November of 2004 within the source of knowledge in topics of inter- framework of the XIII Regional Con- est and a supporter in the promotion of ference of the International Co-opera- public policies for which the co-opera- tive Alliance – ICA – Americas in the tive model has been identified as an city of Buenos Aires and boasted the instrument that will facilitate their attendance of 40 parliamentarians application. from Argentina, Bolivia, Colombia, Ecuador, Mexico, Paraguay, Peru and Moreover, during these past years a Uruguay. group of Parliamentarians, twenty to be exact, has consolidated itself, from This point of encounter between the various parties and political forma- continental co-operative leaders and tions, to take up the co-operative cause the region’s parliamentarians signified and to promote and consolidate it as an exceptional opportunity to reflect an alternative for social development. upon the nature, importance and This task of incidence has allowed the impact of the co-operative model on a co-operative subject to receive special society like Latin America’s, so in need attention and interest within the of social inclusion, economic develop- Colombian Parliament’s public ment, education and communal partic- agenda, thus making it easier to dis- ipation options to solve or mitigate the cuss the various legislative projects impact of the poverty that is generated related to the sector and allowing a from a lack of opportunities and which deeper knowledge of the doctrine, the keeps close to 200 million people in corporate structure, the judicial frame- precarious living conditions in this work and the organisational develop- part of the world. 85 The Colombian Congress, through 11 influence the national, regional and of its members, made an active pres- local governments into incorporating ence in this II Meeting, in which a the co-operative movement in public strong leadership effort to concert the policies as an alternative model for Parliament and the sector was shown socio-economic development; to rec- and also represented the benefits of a ommend, through the International politically serious, responsible and Co-operative Alliance, that the govern- thematic incidence process for the ments and national Parliaments of defence of the general movement’s America have co-operatives as con- interests. sultants in the design and execution of Four themes focused the attention of public policies and legal reforms and the parliamentarians invited by ICA to utilise the inter-parliamentarian Americas, which were debated within institutions already existent on a an equal number of workshops. These regional and sub-regional level to pro- were: The Co-operative movement mote the co-operative model as a fac- and globalisation: the role of co-opera- tor in social and economic develop- tives within the framework of interna- ment. tional business; Workers’ co-opera- They also committed themselves to tives: an alternative for the social forwarding legislative reforms that development of Latin America; Valid- would allow the establishment of an ity, progress and perspectives on the adequate legislative framework for the co-operative legislation in Latin Amer- good and normal development of the ica and the co-operative tax regime: A co-operative movement in each of policy aimed towards the promotion their countries, taking into account the of the American co-operative move- ILO’s Recommendation 193 from 2002, ment. among others, about the promotion of The conclusions of this meeting were co-operatives in the entire world and picked up in a Declaration subscribed also to promote the establishment of a to by all those who assisted and which co-operative legislation framework for reiterated their will and political deci- all the countries of Latin America. sion to promote, within their respec- Likewise, they offered themselves as tive countries, the socio-commercial spokespeople to insist upon their co-operative model, since they con- respective governments that they sider it “an instrument of equality, teach co-operative values and princi- social wealth and employment and to ples, and their entrepreneurial prac- stimulate its application to further tice, within the subjects taught to their social and economic development, youth. based on the principles adopted and The event made it clear that it was nec- distributed by the International Co- essary to create a network of American operative Alliance.” Parliamentarians who agreed with the In effect, they offered their parliamen- co-operative movement’s philosophy, tarian support to, among other actions, and through which could be generated 86 a permanent channel of communica- tutes a hopeful starting point for the tion about doctrinarian, legal, aca- regional integration and institution demic, congressional and governmen- strengthening processes, which will tal subjects of interest to the American have to be translated into a strong co-operative movement, as well as a movement with an ample base of fol- follow-up to any agreed upon actions lowers and firmly rooted in local com- and a channeling, through Interna- munities and with an impact in chang- tional Co-operative Alliance Americas, ing the living and development of the proposals that call for a consoli- conditions of millions of Latin Ameri- dation of the American co-operative cans. movement. This effort by the Latin American co- V. Solidarity, mutual operative movement to approximate their interests to those of national leg- aid and integration: a islators is very important to mention framework of reference because an extraordinary regional to confront economic impact would result from the consoli- dation of a legislative current that globalisation with hope identifies with the co-operative move- 1. The Colombian co-operative ment, their universally accepted val- movement in the face of free trade ues and principles, and this fact would The process of economic globalisation without a doubt contribute towards is already a fact. The process of com- the reinforcement of the co-operative mercial opening had been deepening movement in our continent. throughout the entire world during This effort proves to be equally signifi- the last decade, with the modification cant given that the III Meeting will be of the international business scheme, held in Mexico City on July 2005, pre- the suppression of tariff and non-tariff cisely during the preparatory stages barriers that facilitates the movement for the International Co-operative of goods, services and people, which, Alliance’s Global Assembly – ICA when added to the advancements in which will be celebrated in Cartagena technology and information, make the de Indias from September 17th 2005, development of international transac- and where we hope to have the oppor- tions more and more essential. tunity to consolidate the Latin Ameri- This panorama makes most urgent the can co-operative leadership and to taking on of a political, social and eco- recognise the efforts that have been nomic position by the global co-opera- made in the name of this common tive movement, and in particular, by cause during many years of dedica- the Colombian movement, that will tion. allow it to face this economic reality The generation of spaces of this nature with the sufficient participation capac- geared towards the establishment of ity in the social and market niches in sectorial incidence channels consti- which it can meet, on the one hand, 87 with the parameters of competition 2. The Colombian co-operative and productivity through the creation movement’s position with respect to of economies of scale and with the the free trade agreement with the development of its function as a regu- United States lator of market failures, and on the other hand, to prepare to adopt the The Colombian co-operative sector, changes that are required by economic represented by the Co-operative Con- tendencies. federation of Colombia – Confecoop, considers that any free trade agree- More than just as a punctual strategy, ment negotiated by the government the Colombian co-operative move- must be based on the precept of ment must make a profound reflection respect toward human beings. That upon its importance in both local and must be its objective. Any negotiation regional environments, in which this that affects the rights and minimum model constitutes itself as a defender guarantees of human beings is con- of the interests of small producers and trary to the sustained development of local consumers, without losing sight a society. This is what we manifested of a global vision of the market. Begin- to the government in an analytical doc- ning from this reflection, we must take ument on the process of negotiation of on the challenges that the scheme the free trade agreement. establishes, without abandoning the co-operative principles and values and We have insisted that the globalisation insisting that globalisation be based on of markets and the aftereffects of a free the premise that it not generate social trade agreement must seek the eco- and economic exclusion and that it nomic benefit of the people without take into account people’s welfare, no generating social exclusion, poverty matter their condition, and that they and economic marginality, tending not be harmed by the effects of a global more towards a negotiation that guar- market. antees an open, equitable and sustain- able economic system. The Colombian co-operative move- ment is party to the idea of an alterna- Furthermore, it seems fundamental tive, dynamic and planned negotiation that the negotiation take into account of the free trade agreement that is cur- the evident asymmetries that exist rently being put forwarded by the between the Colombian and United Colombian government, along with its States economies, so that corrective peers in Peru and Ecuador in view of and levelling mechanisms and clauses the proposal from the United States may be established. Unequal and equally with all of the agreements economies cannot negotiate on equal that are being promoted with MERCO- terms. The negotiation that favours SUR, the CAN, the European Union both parties imposes a base of eco- and Canada. nomic equality.

88 We pointed out to the government Given the current conditions of the with equal emphasis the need to work national economy, showing this ten- on the definition of local policies dency signifies a special fortitude since (internal agenda) that allows for the it has been said in economic analyst correction, for example, of currently circles that one of the concerns relating unworkable patterns of consumption, to the free trade agreement with the asymmetries in the regional develop- United States is its very timing, pre- ment of the country, weakness of cisely given that there are no gener- physical infrastructure (highways, alised indicators of economic recovery, ports and communications) and lim- except in very narrow and specific eco- ited access to education, science, cul- nomic activities, which may hinder the ture, investigation and the transfer of adaptation required once the agree- technology, among others. ment is signed and implemented. 3. Strengths and weaknesses of the Being in conditions of growth can rep- Colombian co-operative movement resent a relative advantage, if and in the face of the free trade process when it is understood where these lev- els of growth are being produced and a Having analysed the fundamental strategy to sustain and deepen them is aspects that charactise the environ- developed. ment of the free trade agreement and the guidelines that the national gov- • The sector has a well-defined niche ernment has given to the various sec- of economic activity, which has been tors of the national economy to orient one of the factors that have acted themselves and determine the effects favourably to accentuate its growth of said agreement on their sectors and and development. Despite its rela- activities, and having illustrated the tively recent “crisis”, the tendencies general situation and specific eco- already analysed demonstrate the nomic activities of co-operatives, it is rising confidence that members have important to take a critical view of the in these institutions and that has movement’s inside in order to review maintained and increased their its strengths and weaknesses, as well activity. as the opportunities and threats that could be derived from the signing of This condition is a capital that must be this agreement. defended without compromise because it is a factor that will deter- 3.1 Strengths mine the permanence of many co- • It is clear that the co-operative move- operatives in the national economy ment has been showing positive signs during the adjustment process to the of evolution, some of which are above parameters defined under the protec- those found in the general economy, tion of the free trade agreement. This indicating that there is a clear ten- is a competitive strategy that must be dency towards the consolidation of developed in any commercial process economic activity in the sector. and if the sector already acknowledges 89 it, it must now worry itself over devel- Mexico predict that the first benefits of oping this advantage. the signing of a free trade agreement fall immediately upon those compa- • In these past years the capacity that nies and sectors which are tied to the has been developed to improve the export of goods and services. In our degree of membership to co-opera- case, since no export culture has been tives is evident, a circumstance that developed throughout the years in the generates financial and economic productive activities of the sector, the support, peerless in the traditional short term benefits of the internation- economic sector, and with the social alisation of the economy will be few connotations that this represents. and pose a serious challenge to develop strategies aimed at shortening It is necessary to accentuate this ten- the path that many businessmen have dency in order to strengthen the mem- already traveled from the very begin- bership base and thus achieve impor- nings of the process of economic aper- tant levels of patrimony capitalisation, ture, which started more than a decade with the later goal of creating finan- ago. cially solid entities that will serve as a support in the design of an investment • The sector’s structure demonstrates strategy oriented towards the partici- that economic activity can be found pation in those commercial schemes developed by an important lot of that have been defined as strategic by companies, but it is also clear that the national government and which many entities do not concentrate will be the ones that receive the most important levels of assets, or what’s concrete benefits when the free trade worse, this sector’s assets are dis- agreement is signed. persed among an elevated number 3.2 Weaknesses of entities, a fact which lessens the competitive capacity in terms of the • The composition of the exportable size of the commercial operations supply generated by the co-opera- that can be developed. tive movement demonstrates that it is substantially reduced and that it Faced with a free trade agreement, also presents a high degree of con- which facilitates the entry of large centration, first of all in activities of companies with important capital and aggressive investments, having a dis- an agricultural nature, and secondly, articulated and dispersed sector with within this sector almost exclusively few alliances and commercial group- in coffee and milk activities. ings can represent one of the greatest This is a serious inconvenience given risks and threats from the free trade that general expectations and the expe- agreement to the Colombian co-opera- riences of countries like Chile and tive movement.

90 VI. A prospective look organisations, the ample geographic towards consolidating and sectorial coverage and their man- agement capacity. our sector The co-operative sector, conscious of 1. Co-operatives with an entrepre- the difficult social and economic situa- neurial vision tion that the country is going through, is counting on its capacity for action to Co-operatives gather all of the virtues further the processes of management that as a company Colombia and promotion, formation and organisa- Latina America clamor for: a philoso- tion, already demonstrated during phy of pure humanism, principles that seven decades of crystallising its co- create and re-create equality and operative doctrine and philosophy democracy with a capacity to convert through concrete experiences on sev- small efforts into gigantic commercial eral fronts of activity, be it in the pro- expressions of social responsibility. duction and commercialisation of The principles and values of the co- goods or in the rendering of multiple operative movement were formulated services in benefit of its members, their more than 160 years ago by the precur- families and the community in gen- sors, and are periodically revised and eral. updated by the International Co-oper- Our formation in an environment of ative Alliance – ICA – as the maximum principles and values makes us instance of integration to adapt them actively and decidedly accompany the to the unique conditions of contempo- state in the formulation and execution rary society. Today, one out of every of policies, plans and programmes five of the world’s inhabitants is linked with adequate solutions for margin- to the co-operative socio-management alised social sectors, vulnerable com- model. munities or economic sectors that The presence and incidence of Colom- utilise management schemes based on bian co-operatives reflects not only solidary associative models, with an their accomplishments throughout eye towards generating opportunities their history, but the potential of a sec- for an important sector of the popula- tor that aspires to be considered as an tion that lacks dignified employment, efficient instrument of national devel- health, education and housing, aspira- opment. tions that correspond to every human being within a society that must guar- The co-operative sector has an enor- antee equality, justice and equity to all mous social, economic and institu- of its members. tional potential. More than three mil- lion Colombians are directly linked to 2. Common objectives for the future co-operatives and close to twice that number receive some benefit from In keeping with some of the policies them, be it directly or indirectly. Like- adopted by the state, the co-operative wise, one can observe the diversity of sector aspires towards working on 91 some of the subjects that strategically co-operativism are aspects of principal assure the full implementation of co- importance that the Colombian co- operative principles and values, in the operative movement wants to address context of a global and infinitely inter- within a prospective exercise initiated communicated world, and to avoid let- this year. ting its institutions fall into practices that would discredit its image and Said exercise will allow us to establish affect the confidence and credibility the sector’s distinctive abilities, and received from its members and the from there, formulate the strategies general public opinion, without which that will have to be observed in the it would be difficult to successfully future so that the co-operative move- function as an instrument of develop- ment achieves a greater socio-eco- ment. nomic position within the country, The normative reforms that allow the multiplying its coverage, all of this movement to adapt to the economic aimed at reducing the poverty and changes of the contemporary world, social exclusion indicators that the the assimilation of technology and country presents today and at achiev- information, the mechanism of sector- ing a greater degree of access to prop- ial self-regulation and self-control, the erty and opportunities that will trans- full exercise of good co-operative gov- late itself into sustainable growth for ernment concepts, economic integra- our society. We hope to achieve the tion and the promotion of productive best results in this endeavour.

92 Editorial and administrative office:

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