Review of Co-op Laws in Fiji (1997)

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This document has been made available in electronic format
by the International Co-operative Alliance (ICA)
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Part II - Review of Country Laws - Fiji (1997)

Source: Co-operative Laws in Asia and the Pacific
by G.K. Sharma (pp.60-66)

Fiji 
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The Fijian Co-operative Act 1947 has 64 articles divided into
10 parts. Some significant provisions under this act are stated
henceforth. 

Part I : Preliminary 
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Under article 2 giving interpretation have two important explanations:

 `Bonus' means a share of profits of a registered society divided among
its members in proportion to the volume of business done. 

`Dividend' means a share of profits of a registered society divided
among members in proportion to the share capital held by them. 

Part II : Registration 
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This part from articles 3 to 10 deal with appointment of Registrar and
his officers and registration procedure. Significant provisions are: 

Under Article 3 only Public Service Commission is authorised to
appoint Registrar and such other persons as Assistant Registrars. 

Under Article 4  a society which has its objects the promotion of
economic interests of its members in accordance with co-operative
principles, or a society established with the object of facilitating the
operations of such a society or association, may be registered. But
co-operative principles have not been explained in the act .

An important and unique provision in this law relates to probationary
societies. Under Article 7 if the registrar does not see fit to register a
society he may defer to register it subject to compliance of certain
terms and conditions for a maximum period of 2 years. During this
period it functions as a co-operative and before the expiry of the
probation period the registrar if satisfied may register the society or
cancel its probationary entitlement. 

Part III : Duties and Privileges of Societies
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Article 14 binds members to dispose of their products through the
Co-operatives, in all types of cooperatives, and in case of failure
members can be asked to pay liquidated damages as provided in
the bye-laws.

This part also deals with amendments, amalgamation division and
transfer of shares etc. of the societies. 

Part IV :  Rights and Liabilities of Members
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This part deals with membership qualifications and voting. While for
primary cooperatives there is principle of one member one vote,
flexibility is provided for secondary co-operatives [Article 27 (e)].

Part V :  Property and Funds of Registered Societies 
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This part deals with loans, deposits and distribution of profits which
is quite flexible. However under rule 31 under the act a minimum
25% of net profit has to be provided for reserve fund.

Part VI : Audit, Inspection and Enquiry 
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Audit is the responsibility of the Registrar under the act. However,
one important feature is that under the act Registrar has not been given
powers to dissolve the managing committee as a result of enquiry or
inspection or nominate any director as provided in many laws in Asia
based on British Indian Model. 

Part VII : Dissolution 
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One very important feature under Fijian law is that if a society has to
Wind up, the Registrar cancels the registration first under article 42
and the winding process/liquidation follows thereafter. Further
disputes during liquidation can be decided by arbitration and does not
give unilateral powers in this regard to the liquidator (Art 46 ch).

Part VIII : Surcharge and Attachment
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Article 52 deals with provision of arbitration in regard to disputes
between co-operatives and their members. 

Article 50 authorises the Registrar to surcharge any member or official
if found guilty during the course of winding up for loss or damages to
the society during its working. 

This part also deals with appeals under the act. 

Part IX : Regulation 
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This details a list of subjects on which the minister is authorised to
make regulations under the Act. 

Part X : Miscellaneous 
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This part provides offences, penalties, powers to exempt from the
provisions under the act etc. which are similar to other co-operative
acts.

New Act of 1996
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The above act of 1947 and amended many times has recently been
replaced by a new act on October 21, 1996. The new law contains
122 articles divided in XIV parts against 64 articles in the earlier law.
The important changes in the new law are:  Some new definitions have
been added under article 2 ; they are: 

i. Co-operative means 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, which are provisionally or fully
registered under this Act as a primary or secondary co-operative,
apex organisation or the National Co-operative Federation
registered according to the provisions of this Act. 

        Provided that:
1. in the case of service co-operatives, at least 51 percent of a
co-operative trade is done with its members; and 

2. in the case of workers' co-operatives, at least 80 percent of the
permanent full time employees, as defined in the Employment
Act, shall be members of a co-operative. 

ii. Honorarium means a portion of the net surplus of a co-operative
divided among some or all of the members of the Board of a
co-operative in consideration of their services which not otherwise
be remunerated, and

iii. Net surplus means the pre-tax surplus after provisions have been
made for the statutory reserve fund as stipulated in Section 100 of
this Act.

        Articles 4 (1) and (2) state objects of co-operative as under: 

1. A co-operative aims at promoting the economic and social
Interests of its members by providing effective services which
the members need and can make use of. 

2. The main purpose of a co-operative is not maximisation of
profits but service to members and a co-operative shall operate
according to sound business principles. 

Under article 5 co-operative principles declared by ICA before 
Manchester Congress (1995) have been included. 

In article 7 under membership of primaries, associations have also
been included (under definition association excludes companies). 

In the old law there is no time limit for Registrar to dispose of the
registration application but now under section 12 (2) two months limit
has been included.

Further under article 26 (1) a co-operative has been authorised to
include in its bye-laws imposition of fines on its members for
any infringement of bye-laws. 

A new part IV has been added to deal with secondary, apex and
National Co-operative.  Under article 45  two or more primary
co-operatives can form a secondary and two or more primary or
secondary co-operatives can form an apex organisation. However,
a co-operative having at least 75% of all cooperatives of that type as
it members only shall be deemed to be an apex organisation. There is
another new article 47 dealing with the functions of National Co-op
Federation.  Another addition, Part VII provides for establishment of
a Co-operative Advisory Board. 

The function of the board is to advise the minister on matters provided
in article 49. The board shall consist of five persons recommended by
the Registrar and the tenure shall not be more than 3 years. 

Article 58  deals with Quorum of General Meeting which is rather liberal

(25%) and in case of adjourned second meeting no quorum is needed. In
the old law, there was no reference to the board but in the new, formation,
functions and working of board has been dealt with in detail under articles
63 to 70.

An important provision under article 64 (3) is that the term of the board
shall be 3 years and one-third members will retire every year. The new law
also provided for functions and powers of General Manager (article 72)
Chairperson (Article 73) Secretary (article 74) Treasurer (article 75) and
supervisory committee (article 76) .

Another change relating to audit under article 81 is that instead of
Registrar himself arranging audit, the audit shall be done now by an
Auditor approved by the Registrar.

Another change relates to enquiry. Under article 85 in addition to registrar,
supervisory committee has also been authorised to conduct an enquiry and
for this purpose appoint a commission of enquiry of not less than two
members who could be non-members also.

With regard to reserve fund under article 100 30% of surplus from
members and 100% surplus from non-members has to go to Reserve
Fund. This percentage can be reduced when reserve fund reaches 50% 
f the assets of the co-operative. 

Further at least 25% of the reserve fund has to be transferred to National
Reserve Fund to be administrated by the National Co-operative
Federation.

In addition under article 101 every co-operative has to contribute to
`Central Co-operative Fund' to be kept by the Registrar and to be
transferred to National Co-operative Federation within 7 years of 
enactment of this act. The amount of this annual contribution shall
be fixed by the Registrar and shall not be less than $40. 

Article 107 also allows co-operatives for conversion to another legal
form with the consent of at least two-thirds members. However even
under the new law power of appointment of liquidator remains only
within the Registrar. 

A new provision under article 116 has been added for establishment
Of a co-operative tribunal to hear disputes and settle other matters,
consisting of 3 persons nominated by Registrar, National Co-operative
Federation and Office of Attorney General one each.


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