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RESPONSE MADE BY THE NEW ZEALAND GOVERNMENT TO THE ILO ON BEHALF OF THE TRIPARTITE REPRESENTATIVES.
ILO Promotion of Cooperatives Report v(1) - questionnaire

In accordance with article 12, paragraph 3, of the ILO Constitution and article 39 of the Standing Orders of the International Labour Conference, Government members are invited to consult the most representative employers' and workers ' organisations, as well as co-operative organisations, in finalising replies to this questionnaire in order that such replies may be received by the International Labour Office no later than 1 June 2000.

Names of most representative organisations of employers and workers consulted:

New Zealand Council of Trade Unions

New Zealand Employers' Federation

Is this a separate reply from an employers' organisation? No

Is this a separate reply from a workers' organisation? No

I Form of the international instrument

Do you consider the International Labour Conference should adopt a new international instrument concerning the promotion of cooperatives?

Yes, New Zealand supports the adoption of a new ILO instrument concerning cooperatives.

If so, do you consider that the instrument should take the form of a Recommendation?

Yes, the status of a revised Recommendation is appropriate for this instrument.

The purpose of a revised Recommendation in this area should be to provide assistance to member countries in determining how best to structure regulatory and policy frameworks to provide for and promote cooperatives, where they are a valuable structure for enterprise.

In order to be relevant and meaningful to all of the ILO 's constituents, a revised Recommendation should be based on the following principles:

it should be practicable, with core principles that can be universally accepted;

it should focus on outcomes or results, so that countries can achieve the underlying principles even if the means to do so differ according to national policy and practice;

it should have a broad application.

II Preamble

Should the instrument include a preamble referring to:

Employment Policy Convention, 1964 (No.122), and Employment Policy (Supplementary Provisions) Recommendation, 1984 (No. 169)?

No, ideally the preamble to the proposed Recommendation on Cooperatives should fully express the intentions of the instrument without reference to other Conventions and Recommendations. Reference to other Conventions and Recommendations can obscure the purpose of the instrument.

Rural Workers ' Organisations Convention, 1975 (No. 141), and Recommendation (No. 149)?

No (see above)

Human resources Development Convention, 1975 (No. 142), and Recommendation (No. 150)?

No (see above)

Job Creation in Small and Medium-Sized Enterprises Recommendation, 1988 (No.150)?

No (see above)

Other instruments? (Please specify.)

No (see above)

III Objective, scope and definition

Should the instrument seek to promote the considerable potential that cooperatives have, in all countries whatever their level of development, to assist their members to:

Create employment and expand access to income-generating activities?

Improve social well-being?

Increase savings and investment?

Attain other economic and social objectives? (Please specify.)

The objective of cooperative regulation and policy in any country should be to promote the potential of cooperative enterprises to enhance the economic and social well-being of their members. Cooperatives may be very diverse in their nature, from essentially commercial

enterprises to organisations that are very concerned with social well-being. The instrument should reflect that potential diversity in purpose.

Do you consider that the instrument should apply to all types and forms of co-operatives and to all economic and social sectors in which cooperatives operate?

Yes, the scope of the provisions should be to cover all cooperatives.

Do you consider that the framework for a definition contained in the Cooperatives (Developing Countries) Recommendation, 1966 (No. 127), is still relevant and adequate? If not, what should be the definition of a cooperative?

No, New Zealand 's preference is for a less prescriptive definition such as that of the International Cooperative Alliance: "A cooperative 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."

Do you consider that a definition of cooperatives should continue to be left solely to national laws and practice or should a definition be contained in the instrument itself?

The definition of cooperatives should be for member countries to determine, but the instrument should give guidance as to what a definition might contain.

Should the instrument encourage the promotion and strengthening of the identity of cooperatives based upon the following unique characteristics:

Voluntary and open membership;

Democratic member control;

Member economic participation;

Autonomy and independence;

Education, training and information;

Cooperation among cooperatives;

Concern for the community?

Cooperatives may be very diverse in their nature, from essentially commercial enterprises to organisations that are very concerned with social well-being. The instrument should reflect that potential diversity in purpose.

Should the instrument encourage measures enabling cooperatives to respond to the needs of disadvantaged groups in society? If yes, what should such measures include?

The instrument should recognise that governments may wish to promote and support the establishment of cooperatives as one element in addressing social exclusion on the part of 'first peoples '.

IV The role of governments, employers ' and workers ' organisations and
cooperative organisations and their relationship

Should the instrument provide for the following role for governments in the promotion and regulation of cooperatives:

Establishment of a policy and legal framework?

Establishment of an institutional framework allowing for the registration of cooperatives in a rapid and simplified manner?

Establishment of a policy and legal framework for the promotion of a vertical cooperative structure? (i.e. primary, secondary and apex bodies).

Adoption of special measures for the oversight of cooperatives?

The instrument should provide for a policy and legal framework for cooperatives. This might include registration, vertical integration of structures and special oversight measures; these are matters that each member State should determine. However, the instrument could identify areas where experience has suggested special provisions or policies are helpful, for instance, in relation to the control of cooperatives by management and the manner in which they can be sold to, or amalgamated with, other enterprises.

Should the instrument provide for governments to have any other responsibilities with respect to the promotion and regulation of cooperatives? If so, please specify.

The instrument could usefully suggest what measures may support the goal of promoting cooperatives, but it should not prescribe such measures as being necessary. This would allow member States to adopt a mix of measures that best meets their circumstances.

Should employers ' organisations be encouraged to:

Make appropriate support services available to cooperatives?

Include cooperative organisations in their regional, national and local groups, especially where the latter deal with policies and programmes having an impact on cooperatives?

Participate in the exchange of experience and the establishment of commercial linkages between cooperatives and other forms of enterprises?

Participate in studies on social and labour market issues of interest to cooperatives?

Participate in programmes for cooperatives aimed at improving product and service quality and access to market opportunities?

Recommend that their members assist workers to establish consumer co-operatives, savings and credit cooperatives and housing cooperatives/

Carry out other activities? (Please specify.)

The instrument could usefully suggest what measures employers ' organisations may adopt to support and promote cooperatives, but it should not prescribe such measures as being necessary.

Should workers ' organisations be encouraged to:

Advise their members to establish cooperatives with the special aim of facilitating access to basic consumer goods, loans, housing and social services?

Promote the establishment of cooperatives in the informal sector in order to improve the competitiveness of micro-enterprises and to organise social services?

Participate in committees and working groups at the national and local levels to consider economic and social issues having an impact on cooperatives?

Participate in the setting up of new cooperatives, such as workers ' co-operatives converted from private and state enterprises?

Participate in programmes for co-operatives aimed at improving productivity and equality of opportunity?

Carry out other activities? (Please specify.)

The instrument could usefully suggest what measures workers ' organisations may adopt to support and promote cooperatives, but it should not prescribe such measures as being necessary.

Should cooperative organisations, and in particular their unions and federations, be invited to:

Establish an active partnership with employers ' and workers ' organisations and development agencies for creating a favourable climate for the development of cooperatives?

Finance and manage their own technical support services, including management consultancy, human resource development and external audit?

Furnish commercial and financial services to affiliated cooperatives?

Represent the national co-operative movement at the international level?

Carry out other activities? (Please specify.)

The instrument could usefully suggest what measures cooperative organisations, and in particular their unions and federations may adopt to support and promote cooperatives, but it should not prescribe such measures as being necessary.

V Policy framework

Should the instrument recommend the promotion of voluntary and independent co-operatives as one of the objectives of national economic and social development?

No, cooperatives should be promoted as a means of engendering economic and social development where this is needed and advantageous. The means by which this may be best done will vary considerably between countries and between industries and scale of enterprise.

The instrument could usefully suggest examples where experience has suggested that specific policies and practices are helpful, but it should not prescribe such measures as being necessary. This would allow member States to adopt a mix of measures that best meet their circumstances.

Should such co-operatives and other enterprises or social organisations be treated on equal terms?

Yes, there should be no legal disincentives to the creation and operation of cooperatives, nor should the law unduly favour co-operatives over other forms of enterprise.

Should member States ' policies include, as recommended by current international standards, measures which:

Create an appropriate legal and institutional framework for cooperatives?

Facilitate access to credit for cooperatives?

Promote education in the principles and practices of cooperative membership?

Develop the technical and managerial abilities of both members and managers?

Contribute to the spread of information on cooperatives?

Improve the level of productivity and quality of the goods and services produced by cooperatives?

Facilitate access of cooperatives to markets?

Improve national statistics on cooperatives with a view to the formulation and implementation of development policies?

The instrument could usefully suggest examples where experience has suggested that specific policies and practices are helpful but it should not prescribe such measures as being necessary. This would allow member states to adopt a mix of measures that best meets their circumstances.

As an example, it could be suggested that member states include coverage of the principles and practises of the cooperative business model in the curricula of educational institutions.

Should the instrument also recommend measures which:

a Limit the role of the State with regard to cooperatives to regulatory functions, dis-solution and the enforcement of cooperative legislation?

The instrument could usefully include examples where experience suggests policies such as limits to the role of the state with regard to cooperatives are helpful but it should not prescribe such measures as being necessary. This would allow member states to adopt a mix of measures that best meets their circumstances.

b Decentralise as far as possible to the regional and local levels the formulation and implementation of policies and regulations regarding cooperatives?

The instrument could usefully include examples where experience suggests policies such as decentralisation are helpful but it should not prescribe such measures as being necessary. This would allow member states to adopt a mix of measures that best meets their circumstances.

c Limit the legal obligations on cooperatives to registration, audits and the receipt of licenses and establishment of business reports in the same manner as is required of any other form of business?

Yes, there should be no legal disincentives to the creation and operation of cooperatives, nor should the law unduly favour cooperatives over other forms of enterprise.

VI Measures for implementing policies for the promotion of cooperatives

A Legislation

It is desirable that member States adopt specific legislation on cooperatives and periodically revise such legislation? If so. Is it desirable that such legislation recognise explicitly the cooperative characteristics listed in question 7 above?

There should be no legal disincentives to the creation and operation of cooperatives, nor should the law unduly favour co-operatives over other forms of enterprise.

Applicable law should not restrict the ability for co-operatives to reform their structures and expand if that is to their members ' advantage. However, the law should also not unduly favour cooperatives over other forms of enterprise law. To this end, competition law and policy should extend to cooperatives, while recognising their special features in terms of the application of competition law and policy. Particularly where cooperatives are economically significant, competition law needs to apply fully, as it would to other enterprises.

Should the instrument recommend the consultation of the employers ' and workers ' organisations concerned, as well as cooperative organisations, in the formulation of cooperative legislation?

Yes

B Establishment of support services for cooperatives

Should cooperatives have access to a package of support services to strengthen their business viability and their capacity to create employment and income?

Where it is needed and advantageous, governments should promote and support the establishment of cooperatives. The instrument could usefully suggest examples where experience has suggested that specific policies and practices are helpful, but it should not prescribe such measures as being necessary. This would allow member States to adopt a mix of measures that best meet their circumstances.

If so, should these services include the following:

a Training programmes for the improvement of the entrepreneurial capabilities of members, managers and employees or cooperatives?

b Research and management consultancy services?

c Access to finance and investment?

d External audit and accountancy?

e Management information services?

f Consultancy services on technology and innovation?

g Legal and tax services?

h Other specialised services (Please specify.)

See 17.1 above

Should the above package of services, in principle, be financed by the cooperative organisations themselves?

See 17.1 above

If such financing is not considered appropriate, or where it is not currently feasible, how should these services be financed?

See 17.1 above

Should the instrument recommend measures to facilitate the access of cooperatives to investment finance and credit? If so:

a Should additional measures be adopted to address related problems, for example, bureaucratic procedures, low level of cooperative assets, cost of loan transactions?

b Should specific measures be adopted to provide for an autonomous system of finance for cooperatives, including credit and savings cooperatives, cooperative banks and cooperative insurance?

c Should credit and finance facilities be offered at market conditions as for other forms of business enterprises?

d Should special conditions be offered to vulnerable groups?

Financial incentives ' such as tax concessions or government grants ' should be available to enterprises on the basis of their desirability for positive social or economic outcomes, rather than based on their enterprise structure. Tax law should not discriminate against cooperatives; it should, on balance, be even-handed as between legal forms of enterprises.

Should the instrument encourage the development of linkages among all forms of cooperatives in order to encourage an exchange of experience and the sharing of risks and benefits for the promotion of the cooperative movement?

Yes, national exchanges of information and experience should be encouraged.

VII International cooperation

Should the instrument recommend that members take appropriate measures to facilitate international cooperation in the following areas:

a The exchange of information on policies and programmes which have proved to be effective in employment creation and income generation for members of cooperatives?

Yes, international exchanges of information and experience should be encouraged.

b The encouragement and promotion of linkages between national and international bodies and institutions involved in the development of cooperatives, in order to:

Exchange personnel and ideas?

Exchange educational or training materials, methodologies and reference material?

Facilitate the compilation and utilisation of research material and other data on cooperatives and their development?

Establish alliances and international partnerships between cooperatives?

Promote and protect cooperative values and principles?

Carry out other activities? (Please specify.)

Where it is needed and advantageous, governments should promote and support the linkages between national and international bodies and institutions involved in the development of co-operatives. The instrument could usefully suggest examples where experience has suggested that specific policies and practices are helpful, but it should not prescribe such measures as being necessary. This would allow member States to adopt a mix of measures that best meet their circumstances.

c Promotion of the access of cooperatives to national and international data such as market information, legislation, training methods and techniques, technology and product standards?

Cooperatives should have access to the same national and international data such as market information, legislation, training methods and techniques, technology and product standards that is available to other forms of enterprise.

Notes

1 Recommendation No. 127 states in Paragraph 12 (I) that laws and regulations should include "(a) a definition or description of a cooperative bringing out its essential characteristics, namely that it is an association of persons who have voluntarily joined together to achieve a common end through the formation of a democratically controlled organisation. making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertaking in which the members actively participate".

2 These are the universal values and principles as expressed in the Statement on the Cooperative Identity, 1995, of the International Cooperative Alliance.