Contents I International Labour Conference 89th Session 2001 Report V (1) Promotion of cooperatives job creation in small and medium-sized enterprises Fifth item on the agenda International Labour Office Geneva II Promotion of cooperatives ISBN 92-2-111957-2 ISSN 0074-6681 First published 2000 The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland. A catalogue or list of new publications will be sent free of charge from the above address. Printed in Switzerland ATA Contents III CONTENTS Page INTRODUCTION . 1 CHAPTER I: Cooperatives towards the twenty-first century . 5 1. The changing environment in which cooperatives operate . 5 1.1. Developments over the past 30 years which may warrant reconsidering the contents and structure of Recommendation No. 127 . 5 1.2. Developing countries . 11 1.2.1. The changing role of the State . 11 1.2.2. Economic effects . 14 1.2.3. Political effects . 16 1.2.4. New trends in cooperative promotion . 17 1.3. Countries in transition . 19 1.4. Industrialized countries . 21 1.5. From state-sponsorship to autonomy: Return to grass-roots democracy 23 1.5.1. Change in environment, changing roles . 23 1.5.2. Globalization and regional trading blocs: Opportunities and risks for cooperatives . 24 1.5.3. Decentralization brings new hopes and challenges. 25 1.5.4. “Participation”: New partnerships emerging in development . 26 1.5.5. The survival kit for primary cooperatives: Participation plus mergers . 27 2. The potential of cooperatives . 27 2.1. The potential of cooperatives in general . 27 2.2. Economic activities . 31 2.2.1. An overview . 31 2.2.2. Trends in cooperative delivery of economic activities . 34 2.2.3. Cooperatives and economic and social development . 45 2.3. Social services . 47 2.3.1. Overview . 47 2.3.2. Trends in cooperative provision of social services . 48 2.3.3. The future for cooperative social services . 58 2.4. The role of cooperatives in public life and civil society . 60 2.4.1. Introduction . 60 2.4.2. Cooperatives and civil society in industrialized countries . 60 2.4.3. Cooperatives and civil society in developing countries . 62 2.4.4. Cooperatives and civil society in countries in transition . 64 IV Promotion of cooperatives CHAPTER II: Prerequisites for success . 65 1. Cooperative entrepreneurship and management skills . 65 2. Government policy and cooperatives . 65 2.1. Background . 65 2.2. Public policy in relation to cooperatives . 66 2.2.1. What cooperatives should expect . 66 2.2.2. Competition policy . 68 2.2.3. Taxation . 69 2.2.4. The contracting State . 70 2.2.5. Education and training . 71 2.2.6. Non-profit versus not-for-profit . 71 2.2.7. Transitional provisions . 72 2.2.8. Internal governmental representation . 73 2.3. International policies . 73 3. Cooperative legislation . 74 3.1. Forms of cooperative legislation . 74 3.2. The status of cooperative legislation . 76 3.2.1. In industrialized countries . 76 3.2.2. In countries in transition . 76 3.2.3. In developing countries . 77 3.3. Current trends in cooperative legislation . 78 3.3.1. The participatory approach to cooperative law-making . 78 3.3.2. Confinement of the State to regulatory functions . 79 3.3.3. Flexibility with regard to the cooperative structure and orga- nization . 80 3.4. The content of cooperative law . 80 3.4.1. Key issues to be covered. 80 3.4.2. Overarching provisions . 84 3.5. Harmonization of cooperative legislation . 84 4. Cooperative support services . 85 4.1. Introduction . 85 4.2. Main types of support services required by cooperatives . 86 4.2.1. Education, training and information . 86 4.2.2. Advice, consultancy services . 87 4.2.3. Central (pooled) services . 88 4.2.4. Research . 89 4.3. Industrialized countries, countries in transition and developing countries 89 4.3.1. Industrialized countries . 89 4.3.2. Countries in transition. 90 4.3.3. Developing countries . 91 4.4. Best practice in cooperative development . 93 Contents V 5. The role of the social partners . 95 5.1. Employers’ organizations . 95 5.2. Workers’ organizations . 97 5.3. Cooperative movement . 98 6. Structural change within cooperatives . 99 6.1. General considerations . 99 6.2. Two forms of integration . 99 6.2.1. Horizontal integration . 99 6.2.2. Vertical integration . 100 6.3. Typical features of cooperative integration . 101 6.4. Important issues relating to integrated systems of cooperatives . 101 6.4.1. Legally prescribed or freely formed integrated systems . 101 6.5. Relationship between government and integrated systems of cooperatives 102 6.5.1. Industrialized countries . 102 6.5.2. Countries in transition. 103 6.5.3. Developing countries . 104 7. International cooperation . 106 7.1. Introduction . 106 7.2. International cooperative structures . 106 7.3. International structures promoting cooperative development . 111 7.4. National organizations promoting cooperatives internationally . 113 7.5. International networks servicing cooperatives . 113 CHAPTER III: Conclusions . 117 BIBLIOGRAPHY . 121 APPENDIX: International Cooperative Alliance — Statement on the Cooperative Identity 125 Questionnaire . 127 Introduction 1 INTRODUCTION Decision to revise the Cooperatives (Developing Countries) Recommendation, 1966 (No. 127) In March 1999, at its 274th Session, the Governing Body decided to include in the agenda of the 89th Session (2001) of the International Labour Conference the question of the promotion of cooperatives, with a view to adopting a revised standard in the year 2002. The last comprehensive discussion on cooperatives in the ILO took place in 1966.