ILO Recommendation 193 one year after: The revival of the cooperative idea

This June marked the first anniversary of the ILO's initiative to encourage the idea of cooperative business. ILO Recommendation 193, for the Promotion of Cooperatives, was formally adopted last year at the International Labour Conference. In the months since, staff in the ILO COOP team have worked with governments and coop bodies to help translate the Recommendation into practice at the national level. Journalist Andrew Bibby reports on the results of their work.

GENEVA - Five million litres of milk makes a lot of butter and cheese, but that's the daily quantity dealt with by the milk marketing cooperative behind the well known Amul and Dhara brands in India. This $500m Gujarat-based business brings together twelve district-based milk manufacturing cooperatives, which in turn allow farmers in over 10,000 villages in Gujarat to benefit by processing and marketing their milk on a shared basis.

Dr V. Kurien, chairman of the parent coop, says the cooperative structure of the business is the key to its success.

"We are proud to be workers in a cooperative movement that allows no distinction of nationality, religion, caste or community," he said during the most recent annual meeting of the company, adding that cooperation had helped bring 'unparalleled improvement' to the lives of rural farmers while helping urban populations gain access to good quality, unadulterated food.

Half a world away, a similar story is unfolding. A small team of graphic designers based on England's south coast make up the design company Wave. Although their work experience is different from that of Gujarati farmers, they have a remarkably similar message. Wave proudly boasts of its credentials as a worker-owned cooperative, helping to create jobs and retain profits in the local community. "We believe in committing ourselves to the well-being of the people who work in our cooperative, the people with whom we trade, our local community and society at large," the business tells its clients.

For the Secretary of the Employers' Group of the International Labour Conference, Antonio Peñalosa ( International Organisation of Employers, IOE), cooperatives can play a major role in the economy of their countries. In a number of countries, they have become successful businesses. Examples are the Groupe Migros in Switzerland, Groupo Mondragon in Spain and the Crédit Agricole bank in France. These cooperatives are often active members of employers' organizations and are playing an important role in national development.

Cooperatives are a massive element of the global economy. Worldwide, an estimated 800 million people are cooperative members, and 100 million make their living in cooperatives in agricultural finance, housing, retail and other sectors. Iain Macdonald, Director-General of the Geneva-based International Cooperative Alliance (ICA), says the figures tell the story: in Burkina Faso, coops control 77 per cent of cotton production, in Malta, coops have a 90 per cent share of the fisheries industry and in the United States, two in every five people are members of coops.

In the year since the ILO's annual labour conference adopted the Recommendation on cooperative, results are already beginning to show at the national and local level. In South Africa, the ILO has assisted in the development of a cooperative development strategy. A new cooperative law is making its way on to the statute books, a move that should lay the groundwork for a welcome boost in coop development there. Guinea-Bissau has also adopted a National Policy on coop development based on the ILO Recommendation, with similar initiatives underway in Ethiopia, Zambia and Zimbabwe. Latin American cooperative movements have organized 10 national seminars to familiarize their members with the new instrument.

The Recommendation has also been used in Russia, where the Russian parliament, the Duma discussed rural cooperative development last December, and in China, where a conference of the All China Federation of Supply and Marketing Cooperatives used the text when debating the conceptual basis for the country's future legal framework for cooperatives.

Cooperatives play a crucial role in reducing poverty and contribute to the ILO's Decent Work agenda First, coops can help create jobs, particularly in economic sectors or geographical regions where conventional companies would struggle to create sufficient shareholder value to be able to operate profitably. Cooperatives can also save existing jobs, by allowing producers in ailing companies to join forces to save their businesses.

Cooperatives also provide a unique channel for poorer citizens to seeking basic social service such as health services, childcare and preschool provision, care for the elderly and community services particularly in developed countries.

Coops can also provide a bridge for people currently working in the informal economy to the formal sector by increasing their ability to participate in the decision-making process and negotiate conditions and prices with clients.

Internationally, cooperatives identify themselves by reference to seven core values adopted by the ICA's General Assembly in 1995. These stress the democratic nature of coops, including the principle of open membership, irrespective of gender, race, political views, religion or social status. Coops also define themselves as autonomous self-help organizations, controlled by their membership.

This last point has not always been adequately understood by governments, who have sometimes embraced the theory of cooperation as a route for economic development and then tried to turn coops into instruments of state. The Recommendation clarifies this point and stresses the participatory nature of cooperation. As Juan Somavia, ILO's Director-General, said at the International Labour Conference last year, "Cooperatives empower people by enabling even the poorest segments of the population to participate in economic progress; they create job opportunities for those who have skills but little or no capital; and they provide protection by organizing mutual help in communities."

The International Cooperative Alliance, which is itself entering a time of regeneration, sees the ILO Recommendation as a valuable tool in its work. "It's the first time for a long time a formal official policy has been produced by an international organization of the status of the ILO," Iain Macdonald says. His task now, he says, is to help disseminate the message: "The trick is to get governments to pay attention to it," he adds.