Cosatu statement on the Draft Co-operatives Bill - 4.April
2001

The co-operative sector has a vital role to play in the
economy. Many of COSATU’s structures and members, as
well as retrenched former members, are active in co-
operatives. Therefore the federation welcomes the opportunity
to comment on the Department of Agriculture’s Draft Co-
operatives Bill.

Co-operatives allow the poor and working people to
participate in the mainstream economy as owners, rather than
as non-owners. However, success of the co-operative sector
will, to a large extent, depend on the way government makes
the necessary institutional interventions and provides resources
towards its vibrant operation.

South Africa has a rich and diverse history of co-operatives,
including a large, relatively informal sector of stokvels, burial
societies and other forms of community savings organisations.
Although they may not consciously define themselves as co-
operatives, such experiences of organic co-operative activity
can form the basis for a strong and vibrant co-operative
movement in South Africa.

Legislation needs to draw on such experiences, and draw
existing and nascent co-operatives into a regulatory net and
provide appropriate support and capacity building.

COSATU believes the approach to co-operative policy and
legislation has to be neither top-down nor market-based.
State support and policy for co-operatives has to create a co-
operative environment conducive to the development of a
powerful and viable co-operative movement and sector.
Hence policy legislation must be enabling, providing a clear
and accessible regulatory framework, incentives and
institutional support.

Policy should also be activist, allowing government to
intervene to directly promote a co-operative sector and assist
emerging co-operatives. Support, technical training, after-
care and even capacitation work should be spread out
amongst several organisations - apex bodies, co-operative
federations, NGOs, training co-operatives, specialised training
centres, tertiary institutions and so on - so that a powerful
network is built up around and within the co-operative
movement. The state has a crucial facilitating role in this.

We believe the Draft Bill has the potential to frame the
development of this sector. However, it has a number of
serious shortcomings both in structure and content. Our key
criticisms of the Draft Bill are that:
· The structure and style are confusing and inaccessible;
· The language and content are overly corporate and
business-oriented;
· The relationship between the state and the co-
operative sector needs clearer conceptualisation;
· The Draft Bill is not sufficiently rooted in member
ownership and control.

The key principles that underpin our approach to the building
of co-operatives are that they should play an important role in
the provision of economic and social needs of the working
class and poor through democratic participation, rather than
operating on a “free market” basis. They must attempt to
subordinate the operation of market forces to the broader
objectives of meeting socio-economic needs.

Their primary activity is to fulfill the needs of their
members and communities, rather than maximise profit.
Any reference to ‘co-operative business’ throughout the Bill
should be removed and where applicable replaced with ‘co-
operative activity’.

The legislation also needs to promote:
· A more equitable distribution of resources;
· Democratic forms of ownership;
· Economic and development benefits to its
membership and society as a whole;
· Economies of scale;
· Income redistribution;
· A democratic ethos;
· Access to economic ownership for the poor and the
working class;
· Economic services at a reasonable cost.

COSATU suggests that the operation of a co-operative shall
be informed by the following internationally accepted
principles:
· Voluntary and open membership;
· Democratic member control;
· Member economic participation;
· Autonomy and independence;
· Education, training and information;
· Co-operation among co-operatives and concern for
community.

Co-operatives existing by themselves or as "islands" are not
sustainable and are prone to collapse or degeneration. For co-
operatives to develop and grow it is essential to build a
powerful, self reliant and self-managed movement and that
they privilege their relationships with each other over other
kinds of economic enterprises, and thus secure and strengthen
their economic viability.

COSATU believes that political democracy, without
socialising the economy, cannot resolve the legacy of
apartheid. Sustainable development requires people to have
access to and control over their economic and social
resources to fulfill their own needs. The co-operative sector is
an important vehicle to ensure that people achieve this.

For the full submission, please visit our website on
http://www.cosatu.org.za/docs/2001/coopsbil.htm

For further information please phone:
Fiona Tregenna, Parliamentary Office, on 021 461 3835

Siphiwe Mgcina
COSATU Spokesperson

[email protected]
082-821-7456
339-4911