CO-OPERATIVES POLICY AND BILL

CO-OPERATIVES CO-OPERATIVES POLICY AND BILLPOLICY AND BILL

By: Nweti Maluleke

TABLE OF CONTENTSTABLE OF CONTENTS

1. Problem statement

2. The Co-operatives Policy

3. The Co-operatives Bill

4. Policy instruments to Support Objectives

• Co-operative development and promotion has for a long time focused in the agricultural sector.

• Development progressed rapidly due to the 1981 Co-operatives Act support and government subsidies.

• The support enjoyed resulted in the development of a large commercial agricultural co-operative sector.

PROBLEM STATEMENTPROBLEM STATEMENT

PROBLEM STATEMENT CONT.

• co-existence of a dual co-operative sector with highly developed white-owned co-operatives and weak black-owned co-operatives.

• The 1981 Co-operatives Act still caters for registration of Agricultural co-operatives

• Agricultural sector Still provided with formal support and other incentives

• Emerging, majority blacks lacks formal support, operate outside of the Act

Cont.

• The need to review 1981 co-operatives Act came due to a need to:

– Provide an enabling environment for all co-operative enterprises in all sectors of the economy to flourish

– Diversify growth of all enterprise types to contribute to economic growth

– Provide simpler registration processes

– Ensure accessibility to the grassroots through decentralization of registration

Cont.

• Co-operatives as effective vehicles for broad-based empowerment

• emerging Black cooperative enterprises compete successfully on a national and global scale.

THE NEW CO-OPERATIVES POLICYTHE NEW CO-OPERATIVES POLICY

• new policy outlines government’s broad guideline to develop and support co-operatives

• outlines the government’s approach to defining the co-operative enterprises as well as the policy instruments that will be utilized to achieve the objectives

• policy statement deals with an important variant of economic enterprise, namely co-operatives

Policy cont.

• promotes the development of economic enterprises and diversifies the ownership, size and geographic location of those enterprises.

• A self-sustaining co-operative movement that can play a major role in the economic, social and cultural development of South Africa

• policy statement should be read in conjunction with those on Small, Medium and Micro-enterprises and the Strategy on Broad Based Black Economic Empowerment.

• Policy document resulted through an intense consultation process, which was initiated in 1997 with the establishment of a Co-operative Policy Task Team.

• The Policy Task Team consisted of the main stakeholders in South Africa’s co-operative movement at the time.

• Nine regional workshops and one national co-operative conference was organized to discuss main policy issues.

Consultative processConsultative process

Cont.

• Cabinet recommended to move the function to the dti

• A National Co-operatives Workshop was held last year March for input from all stakeholders

• Consultation continued at NEDLAC to discuss both policy and Bill

• Report will be adopted by Co-operatives Task Team and taken through other relevant structures

Policy objectives and purpose

Create an enabling environment for co-operative

enterprises which reduces the disparities between urban and rural businesses, and is conducive to entrepreneurship

Promote the development of economically sustainable co-operatives that will significantly contribute to the country’s economic growth

Increase the number and variety of economic enterprises operating in the formal economy;


Increase the competitiveness of the co-operative sector Encourage persons and groups who subscribe to values of

self-reliance and self-help to formalise

Enable such co-operative enterprises to register and acquire a legal status/legal persona separate from their members;

• Defines genuine co-operatives for targeted support purposes


Promote greater participation by black persons, especially those in rural areas, women, persons with disability and youth in the formation of and management of co-operatives.

Establish a legislative framework that will preserve the co-operative as a distinct legal entity.

Facilitate the provision of support programmes that target co-operatives that will create employment or benefit disadvantaged groups.

establishes a code of conduct for co-operative promoters for basic principles to be respected

Definitions, co-operative values and core principles of co-operation

• Policy provides definitions of:

• primary• Secondary• Tertiary

• For purposes of registration their functions are different.

• A (primary) co-operative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.

Other kinds of co-operatives

Other kinds and types of co-operatives include:

1. housing co-operative;2. workers’ co-operative;3. social co-operative;4. agricultural co-operative;5. financial services co-operative;6. consumer co-operative7. marketing and supply co-operative.8. Transport co-operatives/ services

Two characteristics distinguish co-operatives from other types of enterprises: a) they are associations of people who agree to be

the owners, the makers of democratic decisions and users of their joint enterprise;

b) their main purpose as an economic unit is to promote their members by rendering services, rather than to maximize profits.

Scope of policy for support purposes

Applies to established co-operatives but the emphasis is on supporting emerging co-operative enterprises:

Emerging co-operatives: These co-operatives have been identified as struggling for survival and lacking training, skills, markets.

Established co-operatives: These are co-operatives that are mainly operating in agriculture and controlled by the white minority, although they do exist even in other sectors.

Core principles of co-operation:

• Voluntary and open membership• Democratic member control • Member economic participation• Autonomy and independence • Education, training and information • Co-operation among co-operatives • Concern for community

THE CO-OPERATIVES BILLTHE CO-OPERATIVES BILL

Policy instruments to support co-operative enterprises includes:

• Legislation

• Establishing a Co-operatives Development Fund for technical assistance and capacity building.

• Special incentives and support measures for Co-operatives enterprises (the dti)

• NEF designed a special product for co-operatives

Policy instruments to support co-operative enterprises includes:

• Alignment by all COTTI programmes and other dti programmes to support co-operatives

• New Enterprise Agency,

• APEF FUND

• Partnerships

CONT.

• Availing access to Infrastructure through incubation programmes

• Acess to SMME tax incentives as businesses

• Preferential procurement

• Institutional support and the Co-operative Advisory Board

Functions of the CAB

The functions of the Advisory Board are to advise the Minister generally, and to make recommendations, with regard to –

(a) co-operative development policy in the Republic; (b) the application of any of the provisions of this Act or any other

law on matters affecting co-operatives; (c) the publication of any regulations in terms of this Act that may be

necessary or desirable; (d) the provision of support programmes targeting co-operatives that

create employment, benefit disadvantaged groups or lead to greater participation in the economy by women and black people;

(e) the establishment of guidelines for co-operative audits;

(f) any matter referred to the Advisory Board that relates to promoting the development of co-operatives; and

(g) any decision the Minister is required to take in terms of

this Act, on the request of the Minister.

THE CO-OPERATIVES BILL 2004THE CO-OPERATIVES BILL 2004• To provide for the formation and registration of co-operatives, the

establishment of a Co-operatives Advisory Board, the winding up of co-operatives and to provide for matters connected therewith.

• DTI as the central department

• Registrar to move to dti’s cipro

• Establishment of a Unit in the dti/role of the dti

• Accommodate other co-operatives kinds and type provisions

• Onerous sections removed

Conclusion

THANX

Documents

CO-OPERATIVES POLICY AND BILL