Poland: Co-operative Legislation (1993)

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     This document has been made in electronic format by the 
               International Co-operative Alliance
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Source : Tadeusz Kowalak : Co-operatives in Eastern and
Central Europe, Poland; Studies and Reports; Twenty -first in
the series, ICA, Geneva, 1992, 58pp., Price 12 CHF

  
2.3  Co-operative legislation
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2.3.1     The co-operative law of 1982

Unlike some other countries in the region, Poland has no
complex new co-operative law.  The Act of Parliament -
Co-operative Law of 1982 is still formally in force.  It
includes several regulations which no longer have any meaning,
as conditions have changed dramatically since 1982.  In common
with the former Co-operative Law of 1963, its regulations are
formally in accordance with the ICA co-operative principles. 
Important amendments to the Co-operative Law of 1982, which
were passed by Parliament following political changes of 1989,
will be discussed below. 

2.3.2     The law governing changes in the organization and
          operation of the co-operative movement (20.01.90)

There are four main problems approached by the above Law. 
First, it dissolved all co-operative unions: regional, branch
and central alike.  Liquidators nominated and supervised by
the Ministry of Finance had to dispose of co-operative unions'
assets.  Enterprises owned by co-operatives had to be
transformed either into workers' co-operatives organized by
their employees, or into stock companies or co-operatives of
corporate bodies.  Enterprises, facilities and other parts of
the co-operative unions' assets which were not thus
transformed had to be sold.  The liquidation process
accomplished, any financial means left were to be assigned to
the primary co-operatives which were members of the union
being liquidated.  The Act allowed the establishment of new
co-operative unions on the basis of a new Co-operative Law
(not yet in existence), or after 31st July 1991.

Secondly, the law ordered new elections in all primary
co-operatives.  These were to be held within a period of less
than two months, with the threat of going into liquidation if
this were not done.

Third, it made it possible to divide existing co-operatives
into two or more new co-operatives.  This may be done by the
decision of general assemblies, at the request of interested
groups of members, whose rights and obligations are connected
with a separate part of the co-operative.

Fourth, it changed the legal nature and competencies of the
Supreme Co-operative Council (SCC).  The SCC became a
voluntary association of primary co-operatives with the
purpose of promoting collaboration and mutual aid among
co-operative organizations at home and abroad, and of
initiating and organizing co-operative research and
publishing.  The SCC retained its right of legislative
initiative and of expressing its opinion about legislative
acts concerning co-operatives.  One month after the elections
in primary co-operatives, new elections to the SCC had to take
place.  They were to change the composition of the SCC. 
Instead of nominees from the central co-operative unions it
would consist of members elected by representatives of primary
co-operatives, two members for each of the 49 voivodships.

The Act aimed to attain political, structural and economic
goals simultaneously.  Politically it eliminated, and thus
deprived of power over primary co-operatives, the leaders of
the co-operative unions, as these were considered to be
followers of the Communist regime.  The elections at primary
level were intended to eliminate those members of co-operative
bodies, especially of the boards of directors who, as nominees
of the Party, formerly acted more according to orders from
above rather than fulfilling co-operative members' needs. 
This  aim was not achieved.  About 85% of the members of
existing co-operative bodies were reelected. As far as the
structural goal is concerned, the Act cancelled all secondary
and tertiary organizations, thus liberating primary
co-operatives of all interference from higher levels.
Full independence of action was a total surprise. 
Practically, noprimary co-operative's managing body was
prepared to face the new conditions of economic activity.  The
co-operative unions, which could have become the source of
advice, instruction and of eventual financial help, and which
were formerly the only way of providing goods or raw materials
to co-operative shops, the only channel to market goods
whether purchased or produced, were liquidated.  The Law did
not provide any institution which would substitute for the
liquidated unions in activities such as advisory, auditing and
training services.  This resulted in a chaotic situation which
led to a deterioration in the economic situation of the
majority of primary co-operatives.

2.3.3     The revalorisation act of 30th August 1991

The worsening situation of co-operatives had a negative impact
on the situation of the whole national economy, which,
independently, found itself in serious difficulties.  It
resulted in several legislative initiatives aiming either to
amend the Co-operative Law currently in force, or to elaborate
a new Co-operative Law.  The subject proved to be
controversial.  As time passed the decision was made to
regulate first the most important co-operative problems and,
for the time being, to postpone the question of a new
Co-operative Law.  The question of co-operative ownership or,
as desired by some parties, of the privatisation of
co-operatives was given priority.

All except housing co-operatives have been authorised by the
above Law to revalue members' shares through transferring not
more than half of their reserve funds to the share fund.  The
decision regarding revaluing had to be made by co-operative
general assemblies by the end of 1991.  Revaluing was to be
calculated using the relationship between the nominal average
public-sector salary of 1990 and that of 1950, according to
indices published by the President of the Central Statistical
Office for use in the calculation of pensions.

There are two other points included in the Law in question
which seem to be important.  The first allows the
restructuring of the enterprises of the former Central Union
of Horticultural and Apicultural Co-operatives into limited
companies owned by primary horticultural co-operatives -
members of the above Union, by employees of these enterprises
and by farmers having had delivery contracts with them for at
least two years.  This regulation ended long controvevsies
between primary co-operatives and their members, and employees
of the above enterprises, who insisted on transformation of
these enterprises into workers' co-operatives.  The
realization of their demands would have meant denying the
justified property claims of primary horticultural
co-operatives which, in the past, indirectly financed several
important investments in these enterprises. 

The Law in question also contains a regulation giving all
co-operatives, from 31st July 1991 onwards, the right to
associate themselves in auditing co-operative unions which
perform no economic activities other than training and
consulting activities.  This regulation permitted the
reestablishment of upper-level co-operative structures, as
reported above (see 1.4).

2.3.4     The new co-operative law 

As already mentioned, work on the new Co-operative Law started
relatively early.  The draft was ready at the end of 1990 and
the Lower Chamber of Parliament, after long discussions,
passed it on the 19th September 1991.  However, the Senate
(the Higher Chamber) subsequently made amendments to this Law,
and these were neither accepted, nor passed by the Lower
Chamber.

The dissolution of Parliament at the end of 1991 and the new
Parliamentary elections have meant that the stalemate has
continued.  At the time of writing (the end of June 1992) the
new Co-operative law has still not been passed, and a special
Parliamentary Commission is about to deliberate on three
separate projects.  The debate on the new Co-operative Law is
not expected to take place before autumn 1992.

Summing up the changes in co-operative legislation, it can be
stated that:

-    the question of independence of primary co-operatives
     from external bodies was legally solved by the Acts of
     Parliament introducing (from 1st January 1990) economic
     reform, followed by the Act of 20th January 1990 (see
     2.3.2 above); 

-    as far as the problem of introducing an authentic,
     democratic control within co-operatives is concerned,
     this is formally ensured by the Co-operative Law
     currently in force.  The above-mentioned Law of 20th
     January 1990 created the possibility to change the
     composition of elected co-operative bodies;

-    ownership questions have been partially settled by the
     Act of 30th August 1991 (see 2.3.3 above).  However,
     several questions still remain, e.g. transforming
     co-operatives into other forms of enterprise, the
     division of net co-operative assets after liquidation, or
     members' and non-members' capital investments;

-    the necessary process of decentralization within the
     co-operative movement was imposed by the provisions of
     the Act of 20th January 1990.  This not only abolished
     the existing co-operative unions which organized the
     centralization of co-operatives and their structures, but
     also promoted the division of big co-operatives into two
     or more smaller ones.

There are, however, several important problems, some of which
are listed above, which should be solved by the new
Co-operative Law currently under discussion.