Cooperative law: historical meaning and international relevance
15 Dec 2020
Back in September the ICA’s Cooperative Law Committee marked the 25 years from the adoption of the ICA Statement on the Cooperative Identity by hosting an online conversation with leading cooperative law experts. The report on the session along with the recording is available here.
What is cooperative law and why does it matter?
Cooperative Law, as defined by the ICA Cooperative Law Committee (CLC), includes all legal rules that shape a cooperative enterprise and regulate its operations, such as law on cooperatives, international law, national constitutions, administrative Acts, court decisions and jurisprudence, cooperative bylaws and statutes or any other source of law that regulates or impacts the structure of cooperatives or their operations.
Laws on labour, competition, taxation, banking, procurement and land laws, (international) accounting/prudential standards and bookkeeping rules and, audit and bankruptcy can also impact cooperatives.
Right from the very beginning, co-operative law was an important topic for cooperators. It was one of the main themes at the third ICA Congress in 1897 in Delft (Holland), which passed a resolution urging governments to not obstruct the cooperative way and assist them by disseminating knowledge of various forms of association and passing suitable and supportive legislation. In 1904, during the Sixth Congress in Budapest, Hungary, the ICA moved its first ever resolution on legislation and on cooperation in less developed countries, indicating that it was becoming an important part in the ICA’s policy-making process. Another major ICA resolution on cooperative legislation was passed at the 24th Congress in Hamburg, Germany, in 1969.
Meanwhile, with the creation of the ILO’s Cooperatives Unit in 1920, cooperative law gained an international dimension. During the Tenth Cooperative Congress in 1921 in Basel (Switzerland), the first Director General of the ILO, Albert Thomas, presented a paper on the Policy of International Cooperation and had reported on the concerns of the League of Nations on the post war problems including food distribution. He also argued that cooperatives should oppose all wars in all forms, including trade wars, and denounced competition if it weakened association between all nations.
Recent developments
The ICA Cooperative Law Committee was set up in 2019 to provide independent advice to the ICA. The committee is composed of legal experts from multiple jurisdictions who are well versed in cooperatives.
Along with facilitating the reconstitution of the ICA Cooperative Law Committee, the ICA has, since 2017, coordinated review and reports on as many as 60 national pieces of legislation through research undertaken by the ICA-EU Partnership on Cooperatives in Development in collaboration with regional offices. The reports, which also measure how supportive of cooperatives national legislation is, can be accessed here.
In their advocacy towards favorable and conducive legislation, cooperatives are expected to protect the ICA Statement on the Cooperative Identity, which secures the cooperative and ethical values along with the seven operational principles of cooperatives and the all-encompassing international definition of cooperatives. The Statement also promotes a harmonious understanding of cooperatives and application of the corresponding enterprise model, internationally, and is expected to be safeguarded by legislation and State policy. Efforts continue towards bringing cooperative legislation in tandem with this Statement around the world – to help cooperatives, their members and their communities benefit from the ‘cooperative difference’.
Cooperatives continue to advocate for a conducive legal and policy environment. These efforts have led to favorable recent changes in several parts of the world, including the largely harmonised Framework Act on Cooperatives in the Republic of Korea, which will be the host of the next ICA World Cooperative Congress in 2021. The introduction of this Act in 2012 has led to the proliferation of cooperatives in several new enterprise sectors and has furthered the relevance of cooperatives, especially among the youth, who are now establishing freelancers’ cooperatives, among other forms that were not possible before 2012.
The link between the cooperative identity and cooperative law will be further explored at the Third International Forum on Cooperative Law in Seoul, the Republic of Korea on 28-30 November 2021.
For more information about the event, which is organised by the ICA in collaboration with Ius Cooperativum, contact lawforum@worldcooperativecongress.coop
