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;

Policy objectives and purpose

    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

Policy objectives and purpose

  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