Co-operatives Make a Better World: Remarks by Mr José Manuel Salazar-Xirinachs

Remarks by Mr José Manuel Salazar-Xirinachs, Executive Director, Employment Sector, ILO, at the Ministerial Breakfast on “Promoting productive capacity for sustainable livelihoods: the role of cooperatives” at ECOSOC, New York, 5 July 2012

Statement | New York | 06 July 2012
Good morning,

Honorable Ministers, Dear Ambassadors, Ladies and Gentlemen, thanks for being here.

I am very happy to be here to discuss how cooperatives contribute to this year’s ECOSOC theme on Promoting productive capacity, employment and decent work. Contribution of cooperatives to productive capacities, employment and decent work.

Please consider the following numbers and examples, which add to the ones provided by Daniela Bas:
  • The top 300 cooperatives in the world in terms of turnover exceed US$ 1.6 trillion.
  • In Argentina, cooperatives provide 58% of rural electricity.
  • In Colombia, Saludcoop, a health cooperative, provides healthcare services for 15% of the population.
  • In Japan, 9 million family farmers are members of cooperatives.
  • In India, the needs of 67% of rural households are covered by cooperatives.
  • In Switzerland, the largest retailer and private employer is a cooperative. 
  • Some of the largest banks in the world, including Dutch Rabobank, Credit Agricole and Credit Mutuel in France, and DG Bank in Germany are cooperatives.
I am sure each one of you can all add many more examples.

And the diversity of cooperatives ranges from producer, worker and enterprise cooperatives to savings and credit, social services, housing and consumer cooperatives.

Cooperatives contribute to create jobs for young people. The conclusions of this year’s International Labour Conference on youth employment emphasized the potential of cooperative enterprises for young people and how young people are also bringing a new dynamism to cooperative movements around the world.

Cooperative ideals address young people’s concerns for democracy, autonomy, independence, social and environmental responsibility, and ethical business practices.

Cooperatives are also major instruments for those working in the informal economy. Through cooperatives they can access productive inputs, output markets, build selfconfidence, and achieve self-organization and collective voice.

We see this in the case of domestic workers, construction workers, waste pickers, street traders across the world from Indonesia to Kenya and Nicaragua. For instance, domestic workers’ cooperatives have boomed across the globe from India to South Africa and the US. An example of such a cooperative is the BeyondCare child care cooperative in Sunset Park, Brooklyn, which offers its worker owners control over their labor and better access to their earnings. BeyondCare is a worker cooperative of immigrant women who have learned from other immigrant worker owners how to improve their living-wage and working conditions.

Cooperatives also help connect with Global Value Chains. The most important global value chains involve millions of small producers at one end, and millions of ordinary consumers at the other. Think of coffee, cocoa and cotton, for example. Through their cooperatives, small cash crop producers in the South gain access to global markets, and receive a larger share of the value added than would be possible for them individually. At the other end of the chain, consumer cooperatives sell these goods at affordable prices to the general public.

Think of the Oromia Coffee Farmers' Cooperative Union in Ethiopia, which represents 22,000 small coffee growers. It has become a direct exporter bypassing the central auction and giving more control and market share to the producers. The federation has opened a coffee shop in London, thus establishing a direct link between producer and consumer.

Cooperatives are also at the forefront of the fair trade movement, both on the producer and consumer side.

Cooperatives are by their nature and principles socially inclusive and particularly suitable as a form of organization and empowerment for vulnerable groups. Indigenous people in remote rural areas, refugees, migrants, rural women, unemployed persons, the elderly, and the disabled have all founded cooperatives to improve their situation.

Co-operatives have also been playing a role in confronting the challenges of the HIV/ AIDS pandemic in a number of ways: Helping meet the needs of members with HIV/ AIDS and their families directly; Using their links with the community to increase awareness; and Developing new types of co-operatives that care for AIDS patients.

Cooperatives are also uniquely positioned to contribute to the green economy and to green jobs. Agricultural cooperatives, for instance, know from experience the dangers of ecosystem degradation and the related threat to food security.

Renewable energy cooperatives such as in solar energy or wind energy provide access to affordable electrical power and allow people to have a say in its production and distribution. Again, many examples of these.

In some countries renewable energy cooperatives are taking an increasing slice of the energy market. In Germany, Greenpeace Energy is the largest national energy cooperative. Founded in 2000, it has 21,000 members and supplies over 110,000 clients with clean energy.

We are also witnessing how cooperatives have fared quite well during the crisis with respect to employment generation and retention.

ILO Decent Work Response Through Cooperatives

The ILO has long recognized these and other contributions of cooperatives to productive capacities, employment and decent work.
This started right back in 1919. Article 12 of the ILO constitution refers to employers, workers, agriculturalists and co-operators together. In 1920 a Cooperative branch was set up as part of the organization. It is one of the oldest and most firmly established programmes of the ILO.

ILO’s mandate is summarized in the Decent Work Agenda and its four pillars: the promotion of employment, rights at work, the extension of social protection, and the strengthening of social dialogue.

We believe that by their very nature, cooperatives can contribute to the simultaneous achievement of all four of these objectives:
  • they provide members with voice, representation and an organizational platform to defend their rights;
  • they foster economies of scale and greater bargaining power of producers to make work more productive;
  • they extend social protection by harnessing and modernizing traditional systems of mutuality, solidarity and reciprocity; and
  • they deepen and broaden social dialogue by reaching out to rural areas and the informal economy. ILO Recomendation 193 on Promotion on Cooperatives, celebrates its 10th anniversary this year. Since 2002, it has inspired more than 70 countries to change their policies and legislation based on its good practice provisions.
As a result, the cooperative legislation of many developing countries has been subject to profound reform.

All cooperative laws adopted since, have reduced state influence over, and state sponsoring of, cooperatives, increased cooperative autonomy and self-reliance, and cut any links that might have existed between cooperatives and political organizations. More recently, countries going through a transition process in the Middle East and North Africa have taken on/ this Recommendation and have used it to enhance the relevance and viability of cooperatives of all types and all levels.

We can proudly say that today, most countries in the world have established a conducive legal and institutional basis that will allow genuine cooperatives to emerge and flourish. We also have important technical cooperation and capacity building activities. For instance, ILO’s Coop Africa programme worked from 2007 to 2011 covering 14 countries in Eastern and Southern Africa and benefiting more than 4,000 primary cooperatives through business support services, and 287,274 cooperative members with capacity building initiatives. Working mostly in the agriculture sector and the informal economy, the programme targeted local cooperatives and groups; business development services (BDS) providers; and cooperative apex organizations. The project helped increase the turnover of cooperatives by 26.6% and contributed to the creation of more than 4,000 jobs. 170,899 self-employed had their productivity increased.

My.COOP, launched in January 2012, is a training package and programme on the management of agricultural cooperatives. It is available in Spanish, and it is being translated into French, Arabic, Bahasa and Kiswahili, My.COOP is managed through a creative common agreement between partners and its open access nature, along with its online discussion and distance learning platforms have already made it a very highly demanded tool. Over 400 co-operators from around the world are discussing critical issues to managing cooperative enterprises everyday on the online discussion platform, from financial management, supply of inputs, marketing to balancing between member interests, business opportunities and social considerations.

I would like to finish here. Let me just add that we have an excellent and long standing working relationship with the International Cooperative Alliance and we are also participating quite actively in the International year of cooperatives.

Thank you for your attention and I look forward to your interventions.