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A Guide For Grassroots Activism Create Work Through Worker Cooperatives: A Guide For Grassroots Activism Create Work Through Worker Cooperatives 2 A Guide For Grassroots Activism Acknowledgements COPAC would like to acknowledge the efforts and struggles of unemployed peoples movements, progressive trade unions and community organisations who are at the coalface of developing emerging worker cooperatives in South Africa. We would like to thank the Rosa Luxumburg Foundation for their support in laying the foundations for building a bottom up and grassroots driven solidarity economy movement in South Africa. This experience and practice has inspired the production of this guide. This guide emerges from a long process of reflecting on practice and input from grassroots forces engaged in transforming their lives. We would also like to thank the Hivos Foundation for supporting the activist school that engaged with a draft of this guide. Create Work Through Worker Cooperatives 3 A Guide For Grassroots Activism Table of Contents Glossary of Terms 7 Section One: Understanding Worker Cooperatives in the Solidarity Economy Module 1: Using the Guide 9 1.1 Introduction 9 1.2 Purpose of the Worker Cooperative guide 10 1.3 Key Principles for Process Facilitation 11 1.4 Being a Facilitator 11 1.5 Workshop Guidelines 12 Module 2: Worker Cooperatives in the Solidarity Economy 14 2.1 Objectives 14 2.2 What is a Worker Cooperative? 14 2.3 The Importance of Worker Cooperatives 19 2.4 Worker Cooperative Theory 19 2.5 Threats to Worker Cooperatives 23 2.6 Contexts for Worker Cooperative Development 25 2.7 The South African Experience of Worker Cooperatives 26 2.8 Understanding Success Factors in Worker Cooperatives 29 2.9 Worker Cooperatives Build Power 30 2.10 Gender Issues in a Cooperative 31 2.11 Steps for Setting Up a Worker Cooperative 34 Section Two: The Ground Work Phase Module 3: Steps to Undertake Ground Work 37 3.1 Objectives 37 3.2 Key Steps to Lay the Ground Work for a Worker Cooperative 37 3.3 The Importance of the Ground Work Phase 37 Module 4: Step 1 - How to Organise in Context 39 4.1 Objectives 39 4.2 Gathering Information on the Context of the Worker Cooperative 39 4.3 Mapping Support Relationships 40 Module 5: Step 2 - How to Develop a Concept Document 43 5.1 Objectives 43 5.2 What is a Concept Document? 43 5.3 Content of a Concept Document 43 5.4 Sample Concept Document 45 Create Work Through Worker Cooperatives 4 A Guide For Grassroots Activism Module 6: Step 3 - How to Conduct a Feasibility Assessment 51 6.1 Objectives 51 6.2 Importance of the Feasibility Assessment 51 6.3 Feasibility Assessment Questions 51 Module 7: Step 4 - Financing Options 54 7.1 Objectives 54 7.2 The Importance of Finance in a Worker Cooperative 54 7.3 Types of Capital in a Worker Cooperative 54 Module 8: Step 5 - Education and Training Options 56 8.1 Objectives 56 8.2 Types of Skills Needs in a Worker Cooperative 56 Module 9: Step 6 - Designing a Self-Management Model 58 9.1 Objectives 58 9.2 Elements of a Self-Management Model 58 9.3 Self - Management Structures Within the Worker Cooperative 59 Module 10: Step 7 - Designing a Worker Cooperative Strategic Business Plan 62 10.1 Objectives 62 10.2 Strategic Development Cycles 62 10.3 Content of a Business plan 63 Module 11: Step 8 Legal Framework Options and Registration Requirements 85 11.1 Objectives 85 11.2 Recommended Requirements for Registration of a Worker Cooperative 85 11.3 Registering a Worker Cooperative 85 11.4 Sample Constitution 89 Module 12: Preparing for Start-Up 112 12.1 Objectives 112 12.2 Start-Up Checklist and Requirements 112 Section Three: The Start-Up Phase Module 13: Designing a Worker Owner Guide and Implementing Policies 114 13.1 Objectives 114 13.2 Designing a Worker Owner Guide 114 Create Work Through Worker Cooperatives 5 A Guide For Grassroots Activism Module 14: Managing Finance 118 14.1 Objectives 118 14.2 What is Financial Management and Why is it Important? 118 14.3. Key Tools for Ensuring Effective Financial Management 118 Module 15: Movement Building, Value Chains and Networks 125 15.1 Objectives 125 15.2 Movement Building through Campaigns 125 15.3 Learning Exchanges 126 15.4 Organising Local Solidarity Economy Forums 126 15.5 Social Media Within the Solidarity Economy Movement 129 15.6 Value Chains 130 Section Four: The Expansion and Consolidation Phase Module 16: Problem Solving Tools 133 16.1 Objectives 133 16.2 Introduction 133 16.3 Problem Solving Approach 133 Module 17: Understanding Expansion and Consolidation 135 17.1 Objectives 135 17.2 Expansion and Growth Phase 135 17.3 Steps for Expansion and Consolidation 135 Expansion 136 Conclusion 138 Create Work Through Worker Cooperatives 6 A Guide For Grassroots Activism GLOSSARY OF TERMS Business Plan The plan that shows how the worker cooperative will practically achieve its objectives. Capital In this guide is used to refer to money/finance. It is the finance that worker cooperatives need to pay for equipment, to expand, and to cover costs. Concept document want it to do, its objectives, how it will function and so on. Feasibility Assessment A process of research and asking questions to find out if your proposed cooperative is likely to be successful. That is, whether the idea is feasible. Fixed Costs These are the costs in a worker cooperative that remain largely the same every month regardless of how much is produced, such as rent. These are also sometimes called overhead costs. Membership Fee This fee is paid by members upon joining the cooperative. The members determine the amount of the fee democratically. Members of the cooperative pay this fee annually. Member Share - A member share is a long-term investment amount paid by members into the cooperative. The number of shares and the value of the share are determined by the members democratically. Every member will have a membership share capital account reflecting that member s contribution towards their share or shares. Part of the surplus will grow every year if a surplus is made. Variable Costs These are costs that increase as an amount of the product being produced increases. For example, in a bakery cooperative flour is a variable cost. If more bread is produced, the amount spent on flour will be more, and vice versa. Subscription Fee An annual fee payable towards the running of the co-operative, and may be paid off in equal monthly installments. Some worker cooperatives do not charge such a fee. Surplus This is the difference between income and costs at the end of a financial year. The allocation of surplus is determined by all members in the cooperative in accordance with its constitution and policies or bye laws. In normal capitalist businesses it is referred to as profit. Working Capital Money to cover fixed and variable costs. It is the money that is used to pay for inputs, like the flour in a bakery cooperative, or wages. Worker Owner/Worker Member A person who works in a worker cooperative, is a member of the cooperative, jointly owns the cooperative, participates in decision making in the cooperative, and benefits from the cooperative. Create Work Through Worker Cooperatives 7 A Guide For Grassroots Activism SECTION ONE: UNDERSTANDING WORKER COOPERATIVES IN THE SOLIDARITY ECONOMY Create Work Through Worker Cooperatives 8 A Guide For Grassroots Activism Module 1 Using the Guide Using the Activist Guide as a Learning Tool 1.1 Introduction COPAC has been engaged in building cooperatives and promoting alternative models of local development for over sixteen years. This guide is a result of these years of grassroots practice and learning. Since 2007 COPAC began researching the idea of the solidarity economy and developing tools to advance this alternative in South Africa. By 2010 COPAC engaged in Solidarity Economy Movement building in 15 township sites in 6 provinces. The experiences, successes and ongoing learning gained from emerging worker cooperatives in these sites have contributed to the development of this guide. South Africa has been severely affected by unemployment. Over a million jobs have been lost since the recession in 2009. Our economics is upside down. Economies will remain unstable and crisis prone as long as our development is held hostage by powerful corporations. These corporations exacerbate the jobs crisis. They are exploiting labour and hold workers ransom through low wages. If these corporations are not making enough profits they retrench workers. Unemployed workers and their families are struggling to survive. Households and communities are experiencing high unemployment and deepening inequality. In South Africa we are increasingly facing permanent unemployment. The link between wage earning and survival is broken as unemployment increases in a deepening inequalities fuel crime, violence against women and children, xenophobia and racial division. The crisis also poses a major threat to the lives of workers, the poor and landless. We need solutions from below that can transform how we live as part of nature, rather than degrading, polluting and destroying nature. We need to advance transformative systemic alternatives so we realise a just transition to survive climate change. The workers and the poor cannot pay the price for the climate crisis. Our society lacks a common vision and a sense of collective solidarity. Our challenges tend to be individualised without bringing into view the big obstacles faced by individuals. Most importantly the distribution of power in South Africa stands against individual solutions. Is it possible to have a different, more human and nature centred economy? Can workers have greater control over their enterprises and the economy? Can workers control the conditions of their employment while not destroying the environment? It is in this context that worker cooperatives become fundamentally important alternative institutions for the unemployed and communities to build their own power and control their own work.

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