CO-OPERATIVES POLICY AND BILL

CO-OPERATIVES POLICY AND BILL By: Nweti Maluleke

TABLE OF CONTENTS • Problem statement • The Co-operatives Policy • The Co-operatives Bill • Policy instruments to Support Objectives

PROBLEM STATEMENT • 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 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 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.

Consultative process • 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.

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: • housing co-operative; • workers’ co-operative; • social co-operative; • agricultural co-operative; • financial services co-operative; • consumer co-operative • marketing and supply co-operative. • 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.

THE CO-OPERATIVES BILL 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

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 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

CO-OPERATIVES POLICY AND BILL