Understanding the ICA Co-operative Identity Statement (1997)

@@@@@@@@@@@@@@@@@@@@@@@@@@@@
Title: Understanding the ICA Co-operative Identity Statement
@@@@@@@@@@@@@@@@@@@@@@@@@@@@


Understanding the ICA Co-operative Identity Statement
by  Ian MacPherson*

(Source:  Report of the Special Workshop on ICA Co-operative
Identity Statement - From Theory to Practice, 17-21 Aug,1997
Jaipur, India, pp.19-31)


********************************************


Nearly two years ago, in September, 1995, the International Co-operative
Alliance, at its Manchester Congress, adopted a reformulation of the basic
principles upon which co-operatives around the world are based. It was
the culmination of a lengthy process that had begun seven years earlier.
The first part of the process, led by Mr. Sven Ake Book of Sweden,
had explored the values upon which co-operatives around the world
traditionally have been based. That phase of the work was completed
at the Tokyo Congress of 1992. The second phase of the process,
involving thousands of co-operators around the world, was completed
between 1992 and 1995; its main achievement was the adoption of
"a co-operative identity page" that sought to describe the essence of the
co-operative way at the dawn of the twenty-first century.

Why were Changes Necessary ?
--------------------------------------
There were eight main reasons for the reformulation of the principles.

1.	Rapid change in Central and Eastern Europe : By 1988 it was
becoming clear that major economic/political changes were sweeping the
countries then under the control of the Union of Soviet Socialist Republics.
Those changes particularly affected co-operatives because the Soviet-style
regimes had used co-operative forms (if rarely co-operative practice) to
carry out some of their major economic and social policies. As the Soviet
countries moved towards market economies, it was vitally important that
a clear vision of the distinctive qualities of co-operative enterprise be
communicated to co-operators and government officials in those nations.

2.	Malaise in Co-operative Movements of Western Europe and North
America : The established co-operative movements of western Europe and
North America found themselves confronting a rapidly-changing economic
situation. While some segments of the movement were thriving amid these
changes others were not: they were struggling against increased
competition, a growing need for substantial new capital in order to survive
and a declining level of support from governments. Perhaps most seriously,
a significant percentage of the co-operative leaders were losing confidence
in the efficacy of co-operative enterprise while memberships seemed
increasingly unaware of the possibilities of co-operative action. A
reconsideration of the principles and a clear statement of the possibilities
of co-operative action could be helpful in overcoming this negative
situation.

3.	The uneven record of co-operative development in Africa :
Co-operative organisations and development agencies had placed
considerable emphasis on the development of co-operatives in  Africa
since the 1960s. While there were several outstanding examples of success,
there were numerous disappointments, largely because of the traumatic
economic changes the continent had seen during the 1980s. There was,
therefore, a need to cultivate a renewed commitment to co-operatives
among many African co-operators.

4.	The dynamic growth of Asian and Latin American co-operative
movements : Many of the most positive developments within the
international movement in recent decades has taken place in Asia and
Latin America. There was a need to understand the nature of these
successes; to "globalize" the principles (a most difficult undertaking); and
to listen more carefully to the voices invigorated by their accomplishments.

5.	The changing role of the state : The relationship between the state
and co-operatives has always been - and always will be - important. In
many of the industrialized societies, in both the North and the South, the
role of the state began to change significantly during the 1980s.
Government support for social and agricultural programmes in which
co-operatives were deeply involved began to lessen. Popular support for
the welfare state, a central commitment in many nations following World
War II, weakened.

These changes challenged the basis on which many co-operatives
had been organized; they also opened substantial opportunities as the need
for co-operative, community-based options arguably became more
important. If those changes and opportunities were to be seized, however,
there was a need for a clear understanding of the relationships between
co-operatives and the state and for the ways in which co-operatives,
particularly social co-operatives, could respond to contemporary needs.

6.	The need for capital : Regardless of size, business interests and
geographical location, many co-operatives were facing the need for raising
more capital as the 1980s drew to a close. It was apparent that the traditional
co-operative way of raising capital - from members - had been rarely
pursued diligently and continuously. As a result, member investment in
co-operatives had not kept pace with their growth; in some instances, it was
doubtful that member investment could meet the needs. As a result, many
co-operatives started to experiment with their capital structures, all the way
from joint ventures with other co-operatives and private firms to offering
shares on the stock markets. The question that inevitably resulted was the
way in which new capital alternatives interfered with, even undermined,
traditional co-operative control structures. For that reason, the revision of
the principles advocated an emphasis on indivisible capital and a
commitment to the autonomy of co-operative organisations. 

7.	The evolving nature of co-operative enterprise : One of the common
misconceptions held by many co-operators is that the organisational
structures, business focus and institutional culture of co-operative
organisations remains essentially unchanged over time.  Another is that
co-operatives must be essentially the same regardless of the kinds of social
and economic services they provided to their members. A more accurate
picture is that co-operatives change in their structures, foci and culture as
they adapt to changing member needs, new technologies, new management
theories, the pressures of competition and government regulation. In other
words, co-operatives are always caught up in the "act of becoming" rather
than in achieving the state of "having arrived".

The continual process of change can be disturbing to some
co-operators : for example, those who envision the perfect or ideal
co-operative; those who have a deep reverence for what the founders -
be they the Rochdale pioneers, Raiffeisen, Kagawa, Nehru or Plunkett -
have left to us; and those who consider the principles more as injunctions
rather than enabling directives.

Moreover, co-operatives serve their members and their communities
by working within three different but inter-related frameworks: member
relations, managerial practices and organisational structures. Each of these
frameworks has its own priorities; all must be synchronized with each
other, creating the essential challenge for those accountable for the operation
of any co-operative entity.

Much like the revisions of principles completed in 1937 and 1966,
those of 1995 were the consequence of the evolving nature of co-operative
enterprise. They were the results of one generation's attempt to use the
enduring basic values of co-operative thought and action to create a set of
principles that could serve as empowering guidelines for co-operators
confronting contemporary realities.

8.	ICA's role as the defender of co-operative values and principles :
Since its creation in 1895, the International Co-operative Alliance has had
the primary responsibility for the definition of the nature of a co-operative.
That has not been an easy task because of contending national views of the
essence of co-operative organisation, because of the impact of differing
political ideologies and because of the complexity of the variety of
co-operative enterprise. During the late 1980s, however, because of the
factors listed above, there was an opportunity to discuss openly issues
entwined in the co-operative identity - such as the role of the state - that
had been difficult to address in the preceding years. It is a tribute to the
leadership of the ICA, particularly Lars Marcus, Bruce Thordarson and
the Board, that the opportunity was seized to elaborate the co-operative
values, to redefine the co-operative principles and to project a co-operative
vision for the next century.

What were the Key Changes that were made?
-----------------------------------------------------
1.	Addition of a definition.

2.	Statement of values on which co-operatives are based and in which
	co-operators particularly believe.

3. 	Co-operatives will not discriminate on the basis of gender and social
	characteristics (added to the previous list which included race,
	religion and politics).

4.	Increased emphasis on the accountability of elected leaders.

5.	Increased emphasis on member economic participation.

6.	Encouragement of formation and expansion of indivisible reserves.

7.	Necessity of autonomy of co-operative organisations.

8.	Need to inform opinion makers about the nature and benefits of
	co-operation.

9.	Increased emphasis on co-operation among co-operatives on the
	international level.
10. 	Articulation of concern within co-operatives for the sustainability
	of the communities in which they operate.

What were the Important Elements in the Approach that was taken?
-------------------------------------------------------------------------------
1.	Including all kinds of co-operative activities : The co-operative
movement can be divided into different sectors by the nature of the
businesses in which they are involved.  Those sectors - the consumer,
worker, agricultural and fish marketing, banking and service movements -
form the five great traditions, all of which had their origins in Europe in the
nineteenth century, all of which have been developed around the world,
taking on different characteristics and objectives depending upon the
societies in which they have emerged. 

Regardless of where they have developed, each of the sectors has
tended to develop its own culture, methods of applying the principles,
interpretations of values and unique sets of needs. In many countries,
these distinctive characteristics have produced national movements that
are not as integrated as one might wish. Other factors in some countries
have also inhibited unity: sometimes, the tendencies towards disunity
emerged from rural/urban splits or political differences; in other instances,
the divisions had their basis more in ethnic identities or different rates of
growth.

Historically, the ICA had demonstrated an imbalance of commitment and
perspective to the consumer movement, an understandable development
given the importance of the Rochdale British experience in its early years.
The 1966 reformulation of principles had sought to rectify the balance
somewhat; the 1995 carried that approach even farther.

Why is it important to give due recognition to all the sectors?
First, if there is going to be co-operation among co-operatives, one of
the key principles, it can only be if the legitimacy and potential for all kinds
of co-operatives are recognized. Second, the movement has always shown
a remarkable capacity to adapt to different situations and to forge new
alternatives; one of its strengths has always been its capacity to find new
forms of organisation and new needs to serve. Most particularly, in the
modern era, it is important that the movement be sensitive to its full range
of possibilities; the most important co-operatives for the future may not have
been invented; the sources for the most important new initiative anywhere
around the globe.

2.	Including all global traditions : Many people talk about globalisation.
Some people argue for thinking globally and acting locally. Such facile
references to a new mode of thinking belie the complexity of doing so. It is
desperately difficult to rise above the understanding we have from our own
context and cultures; it is perhaps a way of thinking that will be widely
possible only after the passage of generations - even though we have been
interdependent as a global society for a very long time.

Within the co-operative world, the challenge of developing a global
perspective has been evident for a long time. Arguably the original
co-operative impulses emerging from Europe in the nineteenth and early
twentieth centuries carried with them implicitly at least, and often quite
overtly, an international perspective: for the most profound co-operative
theorists and leaders, the object was always to create a more co-operative
world and not just a more co-operative community or a better-off
membership.

With all the good will it is possible to muster, however, the original
perspectives were profoundly European in origins, theory and
sentiment. Even the concept of democracy that came to infuse the European
movements - and still are easily discernible in the international movement -
was drawn from the theories of democracy dominant in Europe during the
nineteenth century. It is not unimportant or coincidental that John Stuart
Mill, one of the great liberal democratic theorists of the nineteenth century,
played a significant role in developing the legislative framework upon which
the British movement came to rest.

Moreover, it is deceptively easy, especially for Europeans and North
Americans, to place great emphasis upon the efforts they have made over
generations to export co-operative forms and practices to other parts of the
world.  For understandable reasons they are proud of what has been
accomplished. In doing so, however, they can underestimate what other
peoples have accomplished and, in fact, miss the point that co-operatives
assume significance only if they are embraced by the people they serve
within their own set of priorities and their own ways of knowing. Thus,
each movement, unless it is artificially forced by governments or poorly-
conceptualized development programmes, has its own inner strength,
organisational dynamics and underlying philosophical positions.

Thus, in the task of thinking globally and understanding internationally,
co-operators around the world will have to open their minds to differences
and be willing to challenge the tendency to believe in the superiority of their
own formulations.

The 1995 Identity Statement, through its reconfiguration of principles
and, perhaps most importantly, identification of co-operative
values, sought to reach a better international perspective.  The
accompanying statement on the apparent possibilities for the next century
also sought to achieve something of a global point-of-view.  As the work
of a specific group of people using the best but still limited process
available, these documents are nevertheless only the beginning of what
will be one of the most important challenge confronting co-operative
thinkers in the years ahead.

3.	The concept of guidelines : One of the most important aspects of
the identity page was the concept that the principles are guidelines.  Some
might think that this means that they can readily be dismissed if they are
not conveniently applicable. That is not the case.

Co-operatives function both in the world of ideas in the world of every-day
life. They always manifest - and should manifest - a continual struggle
between what is desirable and what is possible. They require a careful
evaluation of what they are doing at any given time. They raise equally the
question of how they can better carry out their work in conformity with the
directions suggested in each of the principles; they also raise the challenge
of how they conform with the directions and practices suggested by the
integrated application of all the principles.

The principles, then, are not simply measuring sticks. They are
guidelines that require co-operators continuously to evaluate their
co-operatives, to foster member interest and responsibilities and to
consider how they might enhance the effective "co-operativeness" of
their organisations.

What that means is that co-operators should not expect that their
co-operatives will ever achieve perfection; that there is any reason to be
satisfied with what has been, or is being, accomplished.  Equally, though,
they should take great pride in the ability of co-operatives to address major
questions, to grow and to change.

That is partly why I am particularly pleased that the movements
in Asia are considering what the revised principles mean for their
organisations.  I think that is carrying out the intent of the "guidelines"
concept. I would simply urge that you not think that this is an activity
that will have some clear end-point. It should not and, if your movements
are to gain the benefits that truly alive principles can provide, they will not.

What are the Key Issues ?
-------------------------------
1.	State relations : As mentioned earlier, the changing role of the state
had partly led to creation of the co-operative identity page.  Indeed, some
people seemed to think that the consequent issue of state relations had
suddenly become important because of the disintegration of the USSR
and the ideological changes sweeping the liberal democratic societies.

That is not true. In the final analysis, it was not so much the result
of a dramatically new issue as it was an expanded opportunity to reconsider
what had always been a major issue for co-operatives, albeit one that had
been less considered in the older northern movements in recent years.

From one perspective, the essence of co-operativism is people working
together in a self-reliant, self-controlling and self-responsible
way to provide for themselves and to control better their own destiny.
Despite the wishes of some, they do not do so in a vacuum, if only
because their actions are governed by the regulations and policies of the
state in which they function.

Moreover, virtually all co-operative movements start with the assistance
of networks of supporters, often enough government departments.
That means that at certain periods of their history most co-operatives
have close ties to governments: for example, through reliance on them
for training or protection from more powerful competition (especially in
the early days of their operation) or for necessary financial support.
Those ties can often be perpetuated by co-operators wary of cutting ties
with governments and by public servants desiring to maintain their roles for
personal or altruistic reasons.  Such situations can be found in all parts of
the world, but they are arguably more obvious in the developing countries.

The challenge we face then is how to answer the old question of:
"What is the desirable relationship between co-operatives and the state in
contemporary contexts?" There will not likely be a simple or a universal
answer. The direction implicit in the revised principle though is towards
maximum autonomy, towards control by members, towards genuine
accountability to the members by those responsible for the operation of
their co-operatives. In situations where that direction is not evident in how
co-operatives function then, I would suggest, the challenge is how to move
that way in as controlled, clear and forceful manner as possible. That is
why, I think, the initiatives undertaken by the ICA Regional Offices for
Asia and the Pacific in its series of ministerial conferences is so important;
that is why the recent publication Critical Study on Co-operative Legislation
and Competitive Strength deserves wide discussion, both within Asia and
elsewhere.

Another direction that is obvious in the reformulated principles is the
guideline that co-operatives enter into agreement with governments in
such a way that ensures democratic control by the membership. That is not
a direction that can be easily followed: it requires careful assessment of all
possibilities, the willingness to turn some of them down and the exercise of
a judgement as how best to ensure member control in those opportunities
that are pursued.

The importance of giving new and continuing thought to the field of
government relations can hardly be overemphasized. Contrary to what is
argued in some circles, the diminishing role of the state opens up numerous
issues about how communities around the globe are going to deal with
issues of social needs, economic disparities, social justice and resource
management. The capitalist model may provide answers to parts of these
issues, but it will not satisfy them all. The co-operative model will become
increasingly important, but it will do so in collaboration with the state and
perhaps, in some instances, with firms controlled by capital.

In the restructuring of our societies that appears to be underway, there
is considerable space for collaboration, for partnerships with governments
to create societies that are committed to delivering excellent services to the
people based on clear lines of accountability and measures of user control,
two of the qualities co-operatives possess simply because of the structures
they employ.  

2.	Relations with the private sector : One of the most controversial
trends evident in co-operative circles around the world is an increasing
homogenisation of legal structures and methods of operation with those
typical of private corporations. In some instances, particularly in the
financial world, this trend is encouraged by governments desirous of
simplifying regulatory procedures. In others, it is the result of increased
demand for capital, advantageous partnerships and the prevalence of
management models drawn from the private sector.

Among the subsidiary issues that arise the following are particularly
obvious. How to compete with private companies in capital markets? How
to develop managerial approaches specifically appropriate to co-operative
enterprise? How to resist automatic acceptance of the evaluation procedures
and business norms of the much more powerful private sector? How to
sustain a co-operative culture within co-operatives largely driven by the
conventional market place? How to maintain proper balance within the
three spheres of co-operative endeavour - fostering effective membership,
increasing managerial competence and developing appropriate structural
relationships among co-operative organisations?

3.	Member economic participation : One of the more obviously
important changes in the principles was an emphasis on increasing member
economic participation. This change was included in the belief that too many
co-operatives had ignored this vitally-important aspect of the member-
co-operative relationship. All too often, co-operatives had assumed a rather
passive approach to the member relationship, typically in the belief that all
that was essential for cementing the bond was providing good service at
competitive costs with, if possible, a patronage dividend. As important as
these elements of the membership bond are, they are not all that is required
in a well-functioning co-operative: the other parts are a sense of ownership
(as well as the reality of ownership) and continuing member economic
participation.

This emphasis will require careful rethinking of membership responsibilities
by most co-operatives and it will not be easy:  it will challenge some of the
ways of dealing with capital commonly used by co-operatives. What are the
most difficult problems created by this more strongly-stated objective? Are
there new ways we can attract more financial support from our members?

4.	Involving More Women : The co-operative movement has for too
long been a giant standing essentially on one leg. It has under-utilized
women in its board and management structures.  It has not listened carefully
enough to the needs and demands of women. As the roles of women change around the world, will the co-operative movement be in the forefront of that
change? Will it merely follow the lead of others or, even worse, avoid the
challenge and miss the opportunities by merely patronizing half the
population?

In this respect, while there is every reason to continue the efforts on gender
issues so well begun, it is also important to point out and to celebrate the
remarkable strides that have been taken in this region. If the tests are "Have
you examined the realities?"  "Have you looked at possible improvements?" 
"Have you successfully implemented some of the alternatives?" Then you
have been carrying out the kind of continuing dialogue between current
practice and desired improvement that is suggested by the concept of
guidelines. The resultant issue, though, is:  What comes next?

5.	Enlisting Youth : If the process of reinventing the meaning of the
principles is unending, so too is the challenge of enlisting young people.
This has been a perplexing issue for co-operatives both within and without
Asia for many years. The recent accomplishments in the region, however,
suggest that progress is being made and some ways of ensuring the transfer
of our movement to the next generation have been found. 

6.	Community : The seventh principle of the 1995 statement draws
attention to the responsibility co-operatives have for the health of their
communities. Once again, the direction is what is of first importance.
The principle calls upon co-operatives to work with their members for
the sustainable development of their communities. Beyond that, it is up
to co-operatives and their members to define their communities and to
decide upon what is appropriate to undertake. 

What are some of the best examples of how co-operatives currently
enhance the viability of their communities? What are the economic
possibilities that flow from a concern about how co-operatives make
their communities more sustainable? How can different kinds of
co-operatives work together in a mutually-beneficial way to improve
the sustainability of their communities? What kinds of definition of
community make the most sense in the contemporary world and with
the membership of a given co-op?

7.	Civil Society : In virtually every part of the world there is a growing
concern about the decline of a civil society: i.e., one in which tolerance is
prized, the rights of others are respected, the practice of honesty is the norm
and the necessity of "caring for others" (though not necessarily just through
charity) is accepted. Given the values co-operative members cherish,
co-operatives have a natural affinity for the desire to retain the "civil"
qualities of our traditional societies and to create new senses of community
in the contemporary world.  These are matters that are greater than the
co-operative movement but the issues involved suggest the possibility of
a flowering of co-operative enthusiasms if only the links can be made.
The question then is : How do we encourage others to understand that the
co-operative way can be a useful way in addressing some of the most
difficult questions of our time? 

8.	Building on diversity : In the end, one of the most complex
challenges facing co-operators is : How to bring together the varieties of
co-operative enterprise and the varieties of national traditions to present a
coherent vision of the co-operative possibility? It is a task that was beyond
the capabilities of even the remarkable groups of co-operative leaders who
shaped the movements of the nineteenth century.  It has been a task that the
leaders of the twentieth century also failed to complete. Is it one we can
undertake? Can you, for example, build through local and national
experiences in the Asian countries to create a clear vision with specific
actions and goals for the over-all benefit of this region? How will you
contribute to the global quest for ways to benefit from the continual
assessment of how well we live up to the guidelines we call principles.

Why is the Asian Experience Particularly Important ?
---------------------------------------------------------------
You have, I think, a particular responsibility in all these matters. While
there are several possible reasons that might be mentioned, three are
arguably of special importance.

1.	Economic importance of Asia : Among the great economic changes
of the last third of the twentieth century was the rise of the Asian "tigers",
in both their older and the newer forms. In trying to anticipate the future, it
is hard not to come to the conclusion that China and India will become
dominant economic powers in the decades that lie ahead.  If the nineteenth
century belonged primarily to Europe and the twentieth century primarily
to North America, then the twenty-first could well belong to Asia. Thus it
is important that co-operatives continue to grow as integral and important
elements of Asian economies and societies. One can argue that the growth
of co-operatives in the two earlier centuries was partly related to the roles
they played in the respective dominant nations; the same will be true in the
future.

2.	The varieties of Asia : In one way, the concept of "Asia" does not
make much sense. When one considers the size of the region, the diversity
of the countries to be found there and the differences among the numerous
cultures, it becomes rather difficult to understand what binds the region
together. But it is that very complexity that makes the co-operative
experiments in this region so rewarding and that makes the possibilities so
intriguing. In building your co-operative future, you have the capacity to
draw upon a host of experiences and numerous ways of thinking about
co-operatives; you have related value systems (for example, in how you
think of communities and in how you operate your economies) which will
assist you in continuing to create your own set of distinctive co-operative
movements. And, whatever your future is will profoundly affect the future
of the international movement.

3.	Matters of Culture : In general, we have paid too much attention to
what co-operatives share as an institutional form and not enough to what
they represent as cultural phenomena: after all, while they are ordinarily
economic institutions, they are also the creatures of cultural contexts. That
is what gives them their richness; that is what makes them almost infinitely
adaptable; that is partly what gives them their special roles. Nowhere are
these simple, perhaps somewhat banal, observations more important than
in Asia. Nowhere more than in this dramatically changing part of the world,
with its myriad cultures and traditions, can this rare and precious quality of
co-operative enterprise be more fully realized. In an age of bland if not blind
materialism, that is a special quality, an important opportunity and a
particular responsibility.

Some of you will have heard at least some of this before but I do not
apologize for some repetition. In the final analysis, the key point of the
1995 revisions was to lessen the opportunities for "visiting experts" to
impart truth and provide specific recommendations. The responsibility,
in fact, was turned back to members and to movement leaders like you.
The identity page and its explanations do not define what should be; they
only point. Co-operators create; they do so best through the arduous but
rewarding work of making the best choices from the many made
possible by the application of the best traditions of co-operative thought
and action.

------------------------
* Mr. MacPherson is the Dean of Humanities, University of Victoria
Victoria, British Columbia, Canada