by AP Brief — A Policy Brief from all sectors of the economy, including agriculture, industry, services, The Cooperatives Unit of the ILO serves ILO constituents.
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The International Co-operative Alliance (ICA) is an independent, non-governmental organization established in 1895 to unite, represent and serve cooperatives worldwide. It provides a global voice and forum for knowledge, expertise and coordinated action for and about cooperatives. Alliance members are international and national cooperative organizations from all sectors of the economy, including agriculture, industry, services, banking, retail, ˜sheries, health, housing, and insurance. The Alliance has members from one hundred countries, representing one billion individuals worldwide. The International Labour Organization (ILO), a specialised agency of the United Nations, aims to promote rights at work, encourage decent employment opportunities, enhance social protection and strengthen dialogue on work-related issues. The ILO views cooperatives as important in improving the living and working conditions of women and men globally as well as making essential infrastructure and services available even in areas neglected by the state and investor-driven enterprises. The Cooperatives Unit of the ILO serves ILO constituents and cooperative organizations and collaborates with cooperative development agencies and training institutions in four priority areas: through evidence based advocacy and sensitization to cooperative values and principles; by developing tailored tools to cooperative stakeholders including management training, audit manuals and assistance programmes; of cooperative principles and practices at all levels of the national education and training systems; and and cooperative law, including participatory policy and law making and the impact on coopera- tives of taxation policies, labour law, accounting standards, and competition law among others. INSTITUTIONAL BACKGROUND
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TABLE OF CONTENTS PART ONE COOPERATIVES AND THE POST-2015 DEBATE ..4 PART TWO COOPERATIVES AND THE PROPOSED SUSTAINABLE DEVELOPMENT GOALS 1) Poverty Reduction . 6 2) Gender Equality .. . 7 3) Quality Education and Lifelong Learning .. .8 4) Health .. . .8 5) Food Security and Good Nutrition .. .9 6) Access to Water and Sanitation .. .. . 10 7) Sustainable Energy .. 10 8) Employment Creation, Livelihoods and Equitable Growth ..11 9) Sustainable Natural Resource Management 12 10) Good Governance 13 11) Promotion of Stable and Peaceful Societies .14 12) Cooperatives and Global Enabling Environment and Long-term Finance..15 PART THREE WAY FORWARD TO THE SUSTAINABLE DEVELOPMENT GOALS: COOPERATIVES HAVE A KEY ROLE TO PLAY .16 ENDN OTES .. .. 18FURTHER READING .. .. 19
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4As we approach the Millennium Development Goals™ (MDGs) target date of 2015, global, regional, national and online thematic consultations have been taking place to frame the post-2015 global development agenda. A consensus on goals, targets and indicators for sustainable development will have to be reached before the end of 2015. The big questions revolve around the ways the international community will respond to the pressing issues of economic development, environmental protection and social equity in a sustainable manner. In total, about one billion people are involved in cooperatives in some way, either as members/ customers, as employees/participants, or both. Cooperatives employ at least 100 million people worldwide. It has been estimated that the livelihoods of nearly half the world™s population are secured by cooperative enterprises. The world™s 300 largest cooperative enterprises have collective revenues of USD 1.6 trillion, which are comparable to the GDP of the world™s ninth largest economy- Spain. 1 As value-based and principle driven organizations, cooperative enterprises are by nature a sustainable and participatory form of business. They place emphasis on job security and improved working conditions, pay competitive wages, promote additional income through pro˜t-sharing and distribution of dividends, and support community facilities and services such as health clinics and schools. Cooperatives foster democratic knowledge and practices and social inclusion. They have also shown resilience in the face of the economic and ˜nancial crises. COOPERATIVES AND THE POST-2015 DEBATE Cooperative Principles 1. Voluntary and Open Membership 2. Democratic Member Control 3. Members™ Economic Participation 4. Autonomy and Independence 5. Education, Training and Information 6. Cooperation among Cooperatives 7. Concern for Community Source: www.ica.coop Hence, cooperatives are well-placed to contribute to sustainable development™s triple bottom line of economic, social and environmental objectives plus the governance agenda, not least because they are enterprises that endeavour to meet the economic progress of members while satisfying their socio- cultural interests and protecting the environment. They o˚er an alternative model for social enterprise, with contributions to sustainable development well beyond job creation. Since cooperatives™ share in GDP and total enterprises is currently relatively small in most countries, their promotion and expansion could be an important instrument for achieving the Sustainable Development Goals (SDGs). This brief highlights the contribution of cooperatives to sustainable development and stimulates discussion on the role of cooperatives in the design and implementation of the SDGs that will succeed the Millennium Development Goals. PART ONE
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5The detailed content of the SDGs is already being discussed and debated by international organizations, states and civil society organizations; yet cooperatives themselves have only recently become active. Consequently, the voices of cooperatives and the cooperative movement as a whole are not being heard clearly and their involvement in the process of developing SDGs has not reached its full potential. This is in spite of the fact that the 2012 Rio+20 United Nations Conference on Sustainable Development recognized the potential role of cooperatives in the realization of sustainable development. 2One possible reason for the invisibility of the cooperative option in the debate is a lack of understanding of the actual and potential contribution of cooperatives to sustainable development, partly due to the disparate nature of literature on this subject. This review is an attempt to begin to ˜ll this gap. The full report shows that though cooperatives were not actively engaged in the design and implementation of MDGs, they made signi˜cant contributions to the realization of these goals. Since the post-2015 development agenda substantially builds on the gains of MDGs, the contribution of cooperatives to such gains rea˛rms their relevance in the on-going debate on the post-2015 development agenda. This is not just in the interest of continuity, but also for the sake of sharing experiences learned in the process of working towards the realization of MDGs that may help avoid past mistakes in designing the future development agenda. Cooperatives and the cooperative movement have a wealth of experiences to share that will help the design and implementation of the SDGs. While more than half the respondents in an ILO survey of the cooperative movement indicated that they have participated in the post-2015 consultations, the involvement of cooperatives in the design of the post-2015 development agenda has been hampered for a variety of reasons. One reason reported is that cooperatives tend to be more preoccupied with local issues than the national, regional and international ones. Since their basic concern is to serve their members™ individual and communal concerns, their voice and presence tends to fade with any focus towards the national, regional and international scenes. Another important reason given however, was that the cooperative movement was not invited to or included in the post-2015 development agenda consultations, or did not know about them. 3 More recently, international cooperative and mutual movement leaders have been more actively engaging in the UN processes around the post-2015 development framework. What is a cooperative? A cooperative is de˜ned as fian autonomous association of people united voluntarily to meet their common economic, social and cultural needs and aspirations through jointly-owned and democratically-controlled enterprises.fl Source: ILO (2002), fiRecommendation 193 Concerning the Promotion of Cooperatives,fl Geneva: ILO (Available at: http://www. ilo.org/images/empent/static/coop/pdf/english.pdf).
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6Cooperatives are highly relevant and important in the realization of the proposed sustainable development goals. This brief highlights the actual contribution of cooperatives to the twelve SDGs proposed by the High-Level Panel of Eminent Persons in the Post- 2015 Development Agenda in their report of 2013. Though the speci˜c goals, targets and indicators will not be agreed upon until September 2015 as part of the ongoing process, these twelve proposed goals re˝ect the range of themes that will likely be covered by the SDGs. Poverty reduction There is a widely held consensus among many actors, including the United Nations (UN), the International Labour Organization (ILO), and the International Co-operative Alliance (ICA), that the cooperative enterprise is the type of organization that is most suited to addressing all dimensions of reducing poverty and exclusion. The way cooperatives help reduce poverty is important – they identify economic opportunities for their members; empower the disadvantaged to defend their interests; provide security to the poor by allowing them to convert individual risks into collective risks; and mediate member access to assets that they utilize to earn a living. For instance, while savings and credit cooperatives (SACCOs) facilitate their members™ access to ˜nancial capital, agricultural cooperatives help farmers access the inputs required to grow crops and keep livestock, and help them process, transport and market their produce. Similarly, consumer cooperatives make it possible for their members and the society at large to access good quality household supplies like food, clothing, and other products at a˚ordable prices. Such services help pull members out of poverty. Agricultural cooperatives are well recognized for their poverty reduction e˚orts: In Tanzania, improved cooperative marketing of agricultural products like milk and co˚ee has meant that cooperative members can a˚ord fees for education of their children; in Egypt, 4 million farmers derive income from selling agricultural produce through agricultural marketing cooperatives; 4 and in Ethiopia, 900,000 people in the agricultural sector are estimated to generate most of their income through cooperatives. 5COOPERATIVES AND THE PROPOSED SUSTAINABLE DEVELOPMENT GOALS The Illustrative Sustainable Development Goals, as proposed by the High-level Panel of Eminent Persons on the Post- 2015 Development Agenda 1. End poverty 2. Empower girls and women and achieve gender equality 3. Provide quality education and lifelong learning 4. Ensure healthy lives 5. Ensure food security and good nutrition 6. Achieve universal access to water and sanitation 7. Secure sustainable energy 8. Create jobs, sustainable livelihoods and equitable growth 9. Manage natural resource assets sustainably 10. Ensure good governance and e˚ective institutions 11. Ensure stable and peaceful societies 12. Create a global enabling environment and catalyse long-term ˜nance Source: HLP (2013), fiA New Global Partnership: Eradicate Poverty and Transform Economies through Sustainable Development,fl New York: United Nations (Available at: http://www. post2015hlp.org/wp-content/uploads/2013/05/UN-Report.pdf, accessed on 15th November, 2013). PART Two
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8Quality education and lifelong learning Cooperatives support access to quality education and life-long learning opportunities by providing the means for ˜nancing education; supporting teachers and schools; establishing their own schools to provide quality education to both youth and adults; and serving as centres for lifelong learning. Cooperatives play a signi˜cant role in facilitating access to education by increasing household incomes, which translates into the ability to meet educational costs. Cooperatives can also be a direct source of educational ˜nance: In Kenya, for example, the main type of back o˛ce loan o˚ered by most SACCOs is for paying school fees, and this trend has been documented similarly in other African countries such as Ghana, Nigeria, Cape Verde, and Uganda. Where local governments have been unable to provide school infrastructure, cooperatives have often ˜lled the gap to build and support local schools. In Ghana and Ethiopia, rebates from fair trade have been used by multi-purpose cooperatives to ˜nance social projects, including construction of classrooms and improving infrastructure in primary schools. Support in other cases has included developing ˜nancial skills of youth and encouraging saving habits, scholarships to members™ children to attend school and higher education, organizing educational competitions, funding equipment and stationery, and maintaining libraries. Cooperatives are increasingly getting involved in direct provision of quality education by setting up their own schools, enabling students to access secondary education in remote areas of Tanzania, for example. In the UK, the Manchester-based Co- operative College has established democratically driven cooperative trust schools, with a strong commitment to social justice and moral purpose. Lifelong learning is provided to members through skills training and knowledge development by many cooperatives, as well as literacy and numeracy for never-schooled members. Health Healthcare cooperatives include workers™ cooperatives that provide health services, patient or community cooperatives that are user-owned, and hybrid multi-stakeholder cooperatives. They can provide anything from homecare to full- scale hospital care. The International Health Cooperative Alliance estimates that there are more than 100 million households worldwide that are served by health cooperati ves. Across Canada there are more than 100 healthcare cooperatives providing mainly home care to more than a million people spanning its eight provinces. SaludCoop in Colombia is a healthcare cooperative, and the second largest national employer, serving 25 per cent of the population. In Japan, more than 125 medical cooperatives serve nearly 3 million patients. 10 Pharmacy cooperatives give mem -bers access to genuine and a˜ordable medicines In Turkey at the end of the 1970s, drug suppliers depended on imports but wholesalers would only accept payments in foreign currency, leading to many pharmacies going out of business, rising prices, and counterfeit medicines. The Association of Pharmacists™ Cooperatives created in 1989 has enabled small pharmacies to bene˜t from the collective purchasing power of cooperatives to supply genuine and a˚ordable medicines. This network of 13,000 pharmacies all over Turkey provides jobs to 40,000 people and is known for its high quality services. Source: ILO (2012), fiHealing Pharmaciesfl (Available at: http://www. ilo.org/global/about-the-ilo/newsroom/news/WCMS_192935/ lang–en/index.htm, accessed on 23rd) November, 2013).
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9In Sri Lanka, health cooperatives are often spin-o˚s to provide healthcare to members of consumer and agricultural cooperatives. 11 In the United States, health care cooperatives operate hospitals and clinics, such as the Group Health Cooperative of Puget Sound with 650,000 members, 30 medical facilities, and 9500 employees, including 1000 physicians. 12 In Nepal, cooperatives o˚er members primary health care services at a low annual family fee. Pharmacy cooperatives in Turkey give members access to genuine and a˚ordable medicines. Financing healthcare is an important role of cooperatives: In the US, healthcare cooperatives are among the most popular types of healthcare insu rance, owned by the policyho lders. Cooperatives that do business under the fair trade label in Africa, such as the Oromia Co˚ee Farmers Cooperative Union in Ethiopia, Kuapa Kokoo Ltd. in Ghana, and Heiveld Cooperative Society in South Africa, often use fair trade rebates to provide public health and healthcare services in remote areas. HIV/AIDS home-based care services are provided by cooperatives in Kenya, South Africa, Tanzania, Lesotho and Swaziland, as well as parts of Asia. Food security and good nutrition Cooperatives contribute to food security by helping small farmers, ˜sher folk, livestock keepers, forest holders and other producers to solve numerous challenges that confront them in their endeavours to produce food. Farming and agriculture is where the cooperative business model is most widely utilised. Cooperatives together have an estimated 32 per cent of the global market share in the agricultural sector. 13 Challenges faced by small agricultural producers include remoteness and lack of access to information about food prices on national and international markets; access to high-quality inputs and variable costs of buying seeds and fertilizer; access to loans to buy these inputs; and lack of transport and other infrastructure in rural areas. Agricultural cooperatives help farmers overcome these obstacles by o˚ering their members a variety of services such as group purchasing and marketing, input shops for collective purchases, and warehouse receipt systems for collective access to credit and market outlet. Cooperatives build small producers™ skills, provide them with knowledge and information, and help them to innovate and adapt to changing markets. Importantly, they facilitate farmers™ participation in decision-making processes and help small producers voice their concerns and interests, and increase their negotiating power to in˝uence policy making processes. In the food supply chain, consumer cooperatives facilitate access to safe food. Cooperatives have helped preserve indigenous food crops, such as indigenous potatoes in Argentina, increasing food security. Diversi˜cation of household food supply, for example by dairy cooperatives, has improved nutrition as well as incomes. Diversi˚cation of household food supply by dairy cooperatives can improve nutrition as well as incomes Members of the Societe des Eleveur de Vache Laitier de Foumbot (COOVALAIF) in western Cameroon increased family consumption of fresh milk, supplied hundreds of litres of milk to the cooperative every day for marketing, and used cow dung to increase maize, bean and potato yields. Annual household income increased from USD430 in 2008 to USD3,000 in 2012, with extra income used to pay school fees for children, for family emergencies, and to diversify into poultry and goat farming. The share of households with year-round access to quality food increased from 14 to 76 per cent over the same period. Source: Heifer International (2012), fiDairy Farmer Cooperative Contributes to Food Security in Cameroonfl (Available at: http://www.heifer.org/join-the-conversation/blog/2012/ October/dairy-farmers-cooperative-contributes-to-food- security-in-cameroon.html).
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Access to water and sanitation Cooperatives are increasingly becoming major actors in facilitating access to clean water and sanitation services to make up for the failures of both the public and private sectors. Cooperatives have provided alternative ways for urban communities to get clean water and safe sewerage services. SAGUAPAC in the Bolivian city of Santa Cruz, for example, is the largest urban water cooperative in the world, with 183,000 water connections serving 1.2 million people, three- quarters of the city™s population, with one of the purest water quality measures in Latin America. 14 In the Philippines, water shortages due to El Niño, managerial problems and ˜nancial losses due to corruption and politicking led the Municipal Council of Binangonan city to allow cooperatives to provide water services. Water cooperatives set up water delivery systems in their neighborhoods. Water cooperatives also provide remote locations that would otherwise have no service. In the panchayat of Olavanna in India, acute drinking water shortages in the 1990s led to the establishment of 70 drinking water cooperative societies by 2012, providing water to more than 14,000 households in the region. 15 In Africa, cooperatives in Ghana, Ethiopia and South Africa have used fair trade rebates to drill boreholes and establish local groups for maintenance. In the US, cooperatives are the most common organizational form of water provision in small suburban and rural communities, formed to provide safe, reliable, and sustainable water service at reasonable cost. There are about 3,300 water cooperatives in the US, providing water for drinking, ˜re protection, landscape irrigation, and wastewater services. 16Sanitation has also been addressed by cooperatives, as part of providing shelter and upgrading slums. In India, the National Cooperative Housing Federation (NCHF) has mobilised the urban poor in more than 92,000 housing cooperatives, with a membership of over 6.5 million people, constructing and ˜nancing 2.5 million housing units, 75 per cent for low income families. 17 In Ankara, Turkey, an alliance between the municipality and the union of housing construction cooperatives has supplied housing for 200,000 low and middle income people, and kept down sales and rental prices in the Ankara housing market. 18 In Africa, too, the National Housing Cooperative Union (NACHU) in Kenya has been at the core of the Slum Up-grading Programme, organizing slum dwellers into cooperatives and helping them acquire decent houses. 19Sustainable energy Cooperatives are visible in facilitating access to sustainable energy, where they are playing a signi˜cant role in generating electricity and distributing it to consumers. They are also leading the way to the adoption of new and renewable energies like solar and wind power in many parts of the world. Best known are t he rural electri˜cation cooperatives that have provided electricity to rural populations in many countries, both developing and developed. In the US, these consumer-owned utilities purchase electric power at wholesale prices and deliver it directly to the consumer. There are 864 distribution cooperatives delivering 10 per cent of the nation™s total kilowatt-hours of electricity and serving 12 per cent of electricity consumers, 42 million people – mainly in rural areas where the return on expensive infrastructure investment was not high enough to attract investor-owned utilities. For this reason, cooperatives own and maintain 42 per cent of the nation™s electric distribution lines, covering 75 per cent of the land mass. Sixty-six generation and transmission cooperatives were also formed to pool purchasing power for wholesale electricity. 20 In Bangladesh, with assistance by the US electricity cooperative movement, a Rural Electri˜cation Board has set up more than 70 rural electric cooperatives, and installed more than 219,000 km of distribution lines connecting 47,650 villages and 30 million people to the grid, including 170,000 rural irrigation pumping stations. 21
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11 Generation of renewable energies has also been taken up by cooperatives. In the UK, a cooperative is selling charcoal and briquettes made from recycled materials, using an anaerobic digester to power the factory. More than 30 renewable energy cooperatives were registered in the UK between 2008 and 2012, including solar power cooperatives in London and Bristol. According to the German Cooperative and Rai˚eisen Confederation (DGRV), 158 out of 250 new cooperatives formed in 2011 in the energy sector operate in renewable energy, and between 2006 and 2011, 430 new energy cooperatives were formed. 22 Cooperatives Europe has set up a working group on energy and environment to promote the role of cooperatives in renewable energy. In developing countries, success stories include a biomass-based power cooperative in Karnataka, India. A major challenge facing energy cooperatives is the high capital outlay required, so public-private partnerships need to be explored. Employment creation, livelihoods and equitable growth Cooperatives play a signi˜cant role in employment creation and income generation. Globally more than 100 million jobs exist in cooperatives, as cited by the ICA. 24 Together with small and medium-sized enterprises, cooperatives are the most significant sources of new employment. 25 While global data on cooperatives™ contributions to creating employment needs improvement, available country evidence is quite compelling. Recent evidence has found that employment in employee-owned enterprises is less likely to be negatively a˚ected by cyclical downturns and that these enterprises had greater levels of employment continuity over the recent economic downturn. 26 A UK study found that employee-owned businesses were more likely to adopt longer-term horizons when investing in their business, invested more in human capital, and had a stronger focus on organic growth. 27A recent book on capital and the debt trap examined four case studies of large cooperatives that showed that enterprises organized and behaved according to cooperative principles – by which democratic control goes together with joint ownership – have weathered the brunt of the crisis, and have even increased employment. 28Cooperative enterprises impact on employment: They employ people directly; Indirectly they promote employment and self-employment through creating marketing opportunities and improving marketing conditions; and They in˝uence non-members whose professional activities are closely related to transactions with cooperatives (such as tradesmen or input suppliers). Source: Develtere, P., I. Pollet & F. Wanyama (eds.) (2008), fiCooperating out of Poverty: The Renaissance of the African Cooperative Movement,fl Geneva: ILO. Country Number of jobs United States 2 millionFrance 1 millionItaly 1,1 millionBrazil 274,000 290,000Kenya 250,000Indonesia300,000India women ColombiaNearly 700,000 through direct employment Source: ICA (2014), fiCo-operative Facts & Figuresfl (Available at: http://ica.coop/en/whats-co-op/co-operative-facts-˜gures). Employment in cooperatives in select -ed countries
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