Introduction

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   This document has been made available in electronic format
      by the International Co-operative Alliance ICA
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  Contribution of Co-operative Enterprises and the International
     Co-operative Movement to Implementation of UN AGENDA 21:
       Programme of Action for Sustainable Development 
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                     Prepared jointly by
             the International Co-operative Alliance
                              and 
                      the United Nations
  Department for Policy Coordination and Sustainable Development

                 Geneva and New York, April 1995


        For information purposes only. Not an official
   document of the United Nations and not officially edited.

                      --------------
                       INTRODUCTION
                      --------------

A.  Recognition by the United Nations of the relevance of
    co-operative enterprise and the international co-operative
    movement to achievement of sustainable development

    In his penultimate report to the General Assembly on the
status and role of co-operatives in the light of new economic and
social trends (A/47/216-E/1992/43 of 28 May 1992) the Secretary-
General concluded that:

    "Most categories of co-operatives, but particularly
    agricultural and consumer co-operatives, are able to make
    significant contributions, and often more effectively than
    other types of enterprise given their member controlled
    character, to ecologically rational and sustainable develop-
    ment. Consequently, in following up the recommendations of
    the United Nations Conference on Environment and Development,
    Governments and all relevant components of the United Nations
    system might find it beneficial to promote the full realiz-
    ation of this potential." (para.46(g)).

The recommendations made in his report by the Secretary-General
for consideration by the General Assembly included the following:

    "Given that co-operatives are of considerable economic
    importance in many Member States, that regional and inter-
    regional trade between them is growing significantly, that
    they contribute to the successful achievement of the
    objectives of structural adjustment while ameliorating the
    severity of the impact of such changes, and that they are
    able to play a significant role in the achievement of an
    ecologically rational and sustainable form of development,
    the General Assembly might wish to consider how best to 
    ensure that it is able to give adequate consideration to the
    economic and environmental significance of co-operatives, in
    addition to their social significance." (para.4 (c):
    emphasis added).

    In the latest report of the Secretary-General to the General
Assembly on the status and role of co-operatives in the light of
new economic and social trends (A/49/213 of 1 July 1994) he
stated, in referring to the continuing damage done to the natural
environment by human societies, the logic of whose organization
continued to promote exploitive and damaging relationships, that:

    "Co-operative enterprises, possibly more than other
    types of enterprises within the market, were able to con- 
    tribute to the reversal of that condition. ... With growing
    practical experience, the co-operative movement took the lead
    in the environmental movement in some countries." (para.59)

The Secretary-General concluded that:

    "Co-operative enterprises provide the organizational means
    whereby a significant proportion of humanity is able to
    take into its own hands the tasks of creating productive
    employment, overcoming poverty and achieving social
    integration. By effectively looking after their own
    interests and resolving their own problems, they reduce
    pressures upon Governments while at the same time creating
    significant public goods." (para. 72(a)).

    "Co-operatives contribute substantially to the common good
    in market economies, principally by improving the efficiency
    and quality of the economy, but also by assuring democrat-
    ization and environmental rationality.   They constitute a
    model for a people-centred and sustainable form of societal
    organization, based on equity, justice and subsidiarity."
    (para. 72(b), emphasis added).

    In its latest resolution on co-operatives (49/155), sponsored
by 33 Member States and adopted by consensus on 23 December 1994,
the General Assembly encouraged Governments "to consider fully
the potential of co-operatives for contributing to the solution
of economic, social and environmental problems in formulating
national development strategies." (operational para.3, emphasis
added).

B.  Characteristics of co-operative enterprises which predispose
    them to contribute to sustainable forms of development

    The International Co-operative Alliance is been the final
authority for defining co-operatives and for elaborating the
principles upon which co-operatives should be based. During
several periods since its foundation in 1895 the ICA has
considered these matters and has made two formal declarations on
co-operative principles, in the 1930s and the 1960s. Given the
continued expansion of the co-operative movement to truly global
dimensions, and the nature of the contemporary societal context
in which the movement operates, ICA and its member organizations
have again given attention to matters of definition, values and
principles.   For consideration by its Centennial Congress, to
be held at Manchester, United Kingdom, in September 1995, ICA has
prepared a draft "Statement on Co-operative Identity". This
includes a definition of co-operatives, a listing of the
movement's key values and a revised set of principles intended
to guide co-operative organizations at the beginning of the
twenty-first century.

   The draft Statement provides the following definition of a co-
operative:

   "A co-operative is an autonomous association of persons
   united voluntarily to meet their common economic and social
   needs through a jointly-owned and democratically-controlled
   enterprise."

   "Co-operatives collaborate locally, regionally, nationally,
   and internationally in federations, alliances and other joint
   activities so that they can meet member needs most
   effectively."

The draft Statement continues with a section on co-operative
values:

   "Co-operatives are based on the values of self-help, mutual
   responsibility, equality and equity.  They practice honesty, 
   openness and social responsibility in all their activities."

The draft Statement then notes that co-operatives reflect the
values already stated by applying seven principles as general
guidelines for their activities. These principles are concerned
with: membership, democracy, financial structure, education,
cooperation among co-operatives, autonomy and community. 

   These principles establish that co-operatives are an
organizational vehicle of direct relevance to achievement of
sustainable development: indeed one is specifically concerned
with sustainable development:

   "Co-operatives are concerned about the communities in which
   they exist.  While focusing on member needs, they strive for
   the sustainable development of those communities through 
   policies that are respectful of the environment and acceptable
   to the membership." (emphasis added).

A further principle is that "The primary purpose of co-operatives
is to serve their members and, as applicable, non-members, in a
prudent and effective manner."

   These two principles, when taken together, imply that co-
operatives are inherently an organizational means for sustainable
development. Almost always each primary co-operative enterprise
is established by individuals who are economically active and
resident within a certain community, or geographically proximate
group of communities. Their families, neighbours and fellow
members of the community reside in the same geographical area. 
Some at least of their children and grandchildren are expected
to reside and work in the same communities. Certain of their
economic and social activities are undertaken by means of their
organization within the co-operative enterprise,  but others are
not, and these are also carried on to a significant extent in the
local community. Thus, members of a co-operative enterprise are
likely to be affected negatively if the operation of the co-
operative is injurious to the local natural environment or in
some other way prevents their community's progress toward a
sustainable form of development.

   Co-operative enterprises are established to help members
achieve certain goals which they have in common, to overcome
certain common problems and to provide benefits that can be
shared among themselves. Their primary purpose is to serve their
members: this may be to meet purely economic needs, such as that
of increasing productivity, securing improved market conditions
and employment and overcoming poverty.  But in working toward
achievement of such goals through joint organization within a co-
operative enterprise members must balance the specific gains -
whether in the short- or longer-term, against the aggregate of
external gains and losses, beginning with the impact on the local
community. They must be concerned to operate their co-operative
in such a way that immediate advantages are not overwhelmed by
broader or long-term disadvantages: hence they are inherently
interested in sustainability in the operation of their co-
operative, and in the condition of their community.

   Co-operatives are autonomous, mutual-help organizations
controlled by their members. They are democratic and
participatory organizations actively controlled by their members,
who, in primary co-operatives, enjoy equal voting rights, on a
one member, one vote basis. They are above all business
enterprises.  Their members are their owners and determine both
the business goals of the enterprise and the means, including the
business practices, whereby those goals may be achieved. In order
to ensure that the co-operative enterprise is operated in a
prudent and effective manner for these purposes, members elect
voluntary boards of supervisors or directors whose task is to
appoint professional managers, who may themselves hire additional
employees for the purpose of ensuring the proper operation of the
co-operative.

   Men and women responsible for the administration of co-
operatives involve members, managers and other employees,
according to their roles, in making decisions and setting
policies.  Hence members of a co-operative business enterprise
are able to ensure that goals and practices are compatible with
and contribute to that sustainable development in the community
which they must consider to be one of the underlying goals common
to all co-operatives operating in their community. This is an
attribute of a co-operative business enterprise which is not
present in non-co-operatively organized business enterprises -
i.e those whose owners are investors and owners of their capital
but who are not at the same time closely associated as either the
enterprise's labour force, or as users or consumers of the
enterprise's outputs of commodities or services.

   Moreover, co-operative enterprises do not operate in
isolation, and hence their concern for sustainability is not of
an isolated or purely local significance. One of the definitions
of a co-operative is that they "collaborate locally, regionally,
nationally, and internationally in federations, alliances and
other joint activities so that they can meet member needs most
effectively."   This is expressed also in the principles, one of
which states that "In order to best serve the interests of their
members and their communities, co-operatives actively cooperate
in every practical way with other co-operatives, locally,
regionally, nationally and internationally." (emphasis added).

   Such collaboration may take the form of business groupings,
which have resulted in many countries in the existence of co-
operative systems of national scope and significant economic
weight. It also takes the form of federations and alliances which
provide a very wide range of services to all members, and
represent co-operative interests in the wider community.   All
of these wider groupings are also organized democratically - that
is, their administration is conducted and control is exercised
in a suitable democratic manner. Consequently, the concern for
sustainability is widened from the local community to national
society, while at the same time the economic and political weight
of the movement can be used to back up the common concern of
members with economically significant action if necessary.

   A further characteristic of co-operatives which is of very
considerable relevance to sustainable development, and which is
expressed as a co-operative principle, is the fact that "co-
operatives are open on a voluntary basis, without political,
religious, gender or social discrimination, to all who can
contribute to, and benefit from, their activities".  Women and
men who are members of the most economically, locationally,
socio-culturally, environmentally and politically disadvantaged
sections of society can use the co-operative form of mutual-help
to empower themselves and to secure some improvement in their
status in the communities and wider societies in which they live
and work. Moreover, because co-operatives actively cooperate in
every practical way with other co-operatives, and have
established in all countries broad federations and alliances, the
disadvantaged find themselves, through co-operative membership,
a part of a national and international movement in which
solidarity is inherent. The concerns of the disadvantaged for
sustainability can be reflected in the broad policy positions
adopted by these wide movements. The possibility for overcoming
poverty and marginality offered by co-operative membership is
itself a major means to reduce pressures which negate progress
toward sustainable development.

   Finally, a central principle of the co-operative movement has
always been education: "co-operatives foster reciprocal, ongoing
education programmes for members, leaders and employees so they
can teach - and learn from - each other in understanding and
carrying out their respective roles."  One goal of this concern
with education is to improve the effectiveness of the operation
of the co-operative as a business enterprise, including where
necessary basic literacy and numeracy, but also where necessary
advanced management studies and computerized operations.   But
a broader goal has always been to facilitate members' self-
education, and for this purpose individual co-operatives have set
aside part of their resources, while wider co-operative movements
have set up special institutions. Given that sustainability is
a central concern of the movement, its attention to education
implies an inherent concern with improving the awareness of
members and their communities in respect to environmental issues
and sustainable development.

C.  Application of an environmental ethic to business
    transactions

    An increasing number of co-operative enterprises and
movements have expressed, on the basis of the values and
principles to which they adhere, an ethical stance in respect to
environmental matters, and have translated this into guidelines
for business practice. For example, in 1993 the Co-operative
Wholesale Society in the United Kingdom defined an ethical
strategy under three headings: care for the consumer, care for
the community and care for the environment. 1/

   Financial co-operatives (savings and credit co-operatives or
"credit unions", co-operative banks and co-operative insurance
enterprises) have been among the first within the co-operative
movement to adopt an ethical position in respect to their
contribution to sustainable development. For example, the
Mouvement des caisses Desjardins in Quebec has adopted a policy
whereby member savings and credit co-operatives ("caisses
populaires") should use their financial functions and resources
to promote sustainable development. They should not make
investments in enterprises identified as pollutant; should
introduce environmental questions when giving credit advice; and
advertise the success of firms involved in environmentally
successful programmes. Credit policies should encourage by means
of financial incentives investment in environmental protection. 
It could help to finance research aimed at improving the quality
of life and promoting respect for the environment. 2/  In Canada
also the Vancouver City Savings and Credit Union established in
1989 an Ethical Growth Fund which was to invest only in
environmentally sensitive firms. 3/

    In other countries co-operative banks have taken a lead in
using their financial resources in favour of investment in
sustainable forms of enterprise. For example, in the United
Kingdom the Co-operative Bank, founded in 1872, published in May
1992 an "Ethical Policy", the first such statement published by
any bank in the country. It had been formulated on the basis of
a research programme whereby 30,000 customers were asked their
views on the importance of ethics in banking, specifically in
respect to people, animals and the environment. In its Ethical
Policy the Bank stated that it would encourage business customers
to take a proactive stance on the environmental impact of their
activities.  It would actively seek out individuals, commercial
enterprises and non-commercial organizations which had a   
complementary ethical stance. 4/

    Co-operative insurance enterprises have also adopted
investment policies based upon sustainable criteria.  For
example, the Co-op Insurance Society in the United Kingdom
launched in 1990 a Mutual Environmental Unit Trust ("ENVIRON")
which was to invest only in enterprises involved in improving the
environment, enhancing human health and safety and quality of
life.  Enterprises that either promoted environmental awareness
among the general public or used exceptionally environment-
friendly methods were also eligible. By 1993 the Trust had
attracted over UK Pounds 30 million in investments. 5/

    Co-operative enterprises and movements use their economic
resources in other ways for the purpose of supporting sustainable
development.  For example, the National Federation of Workers'
and Consumers' Insurance Co-operatives (ZENROSAI) in Japan began
to donate all but one per cent of its business surplus (which
totalled YEN 100 million) to grassroots voluntary organizations
working on environmental and ageing issues. 6/

D.  Assumption of lead in adjustment of business goals and
    practices to meet environmental requirements and 
    recognition by society of the special contribution of
    co-operative enterprise to sustainable development

    In many countries, largely because co-operative business
enterprises respond quickly to the concerns of their members -
who are their owners, and are able to control goals and practices
- they have become concerned with environmental questions earlier
than non-co-operative businesses. They have been motivated to
obtain and use more appropriate technologies, adapt production
schedules, search for more appropriate inputs. Individual co-
operative enterprises have been supported by wider co-operative
organizations and by exchanges of information through the very
large international co-operative network.

    Because of both early interest and the wide experience gained
the co-operative movement has assumed a leading position in many
communities, and has taken action to promote more general
adoption of sustainable businesses in partnership with all
interested elements in society.

    For example, the Union of Consumer Co-operatives (FDB) in
Denmark, which controls one third of the retail market, was the
first to pioneer campaigns against food additives during the
1970s.  It introduced a nutritional policy in 1983. 7/ 

   In 1986 the United Kingdom Co-operative Retail Services Ltd.
won the European Conservation Award for Industry for its efforts
to remove environmentally harmful products from the schedule of
goods retailed through its stores and to introduce those friendly
to the environment. 8/ 

   In 1993 the Swiss economic magazine Bilanz rated the major
consumer-owned wholesale and retail co-operative Co-op Suisse as
number one for attention to ecological issues. 9/

   In the United Kingdom in 1989, an independent survey of the
six multiple-outlet retailers which between them controlled 70
per cent of retail food business placed consumer co-operatives,
which controlled about 12.5 per cent of national business, second
on environmental
matters. 10/ 

E.  Dimensions of the international co-operative movement

    The propensity of co-operative enterprises to contribute to
sustainable forms of development, and the adoption by the
international co-operative movement of an environmental ethic
which has resulted in adoption of co-operative strategies for
sustainable development, are aspects of the situation which take
on particular significance when the dimensions of the co-
operative movement are taken into consideration: these are
probably unequalled by any other member-based and democratically
structured international movement.

    The dimensions of the co-operative movement can be examined
in terms of individual membership, economic function and
significance, and organizational coherence.

    At the end of 1994 a total of 760,000,000 women and men were
members of co-operative business enterprises which were
associated within national federations and unions which were
themselves members of the International Co-operative Alliance. 
Not all co-operatives, and not all national federations, were as
yet members of the Alliance, and it is estimated that the total
number of members, and hence owners, of co-operative enterprises
is currently about 800,000,000 world-wide. This total certainly
reflects some double counting, as a significant number of persons
are likely to be members of two or more co-operatives
simultaneously. However, any reduction to represent the number
of persons who are members of at least one co-operative,
irrespective of how many they are members of, must be balanced
by inclusion of the large numbers - an estimated 100,000,000 -
of non-member employees.   

   Membership of, or employment in, a co-operative enterprise has
economic and social significance also for other members of the
immediate families or households of members or employees.  
Consequently, the world total of persons affected to some
significant extent by association with a co-operative enterprise
- whether as a producer or as a consumer or user - can be
estimated, if the average immediate household or family is taken
to be four persons, at about 3,000,000,000, greater than half of
the world's population.

   In many countries membership in all co-operatives is
equivalent to a high proportion of the adult population.  
Although censuses do not yet record the numbers of persons who
are members of at least one co-operative enterprise, it is
possible, by comparing the known number of members of all co-
operatives (some of whom are likely to be members of two or more
such enterprises) with the total population of economically
active age, to calculate an "index of the dimension of co-
operative membership" within national populations, which can be
used at least as a simple expression of the significance of co-
operative membership in national economic and social life.

   This index, even if limited to individual membership in co-
operative enterprises and national co-operative federations and
unions themselves members of the International Co-operative
Alliance, was in 1994 as high as between 70 and 79 per cent in
Austria, Canada, Cyprus, Finland, Israel and Uruguay. In France
it was 61 per cent, in Belgium and Norway, between 50 and 59 per
cent.   it was between 40 and 49 per cent in Denmark, India,
Japan, Malaysia, Portugal, Sri Lanka and the United States of
America. 11/

   It is not easy to calculate the contribution of co-operative
enterprise to GNP, as no system of national accounts as yet
distinguishes between co-operatively organised and other types
of private business enterprise. In Sweden this contribution was
calculated to be 8 per cent in 1993 (with an annual turnover of
20 billion European currency units - ECU). 12/ 

  In the Basque Autonomous Region in Spain in 1989 it was
estimated that co-operative enterprises accounted for 15 per cent
of regional GNP. 13/

   In Cote d'Ivoire in 1992 it was calculated that coffee and
cocoa marketed by agricultural producers through supply and
marketing co-operatives owned by them contributed 15 per cent of
GDP. 14/  

    Based on what is known of the extent of market shares by co-
operatives in different sectors of national economies, and of the
contribution of the respective sectors to GNP, it is thought
probable that the share of GNP accounted for by value-added in
co-operative enterprises may be from 5 and 20 per cent in
developed market economies and between 10 and 20 per cent in
those developing market economies with a significant agricultural
commodity export component.

   Moreover, co-operative enterprises are active in almost every
economic sector in at least some country: in some sectors, and
in certain groups of countries, they are of major significance.
This is so in agriculture, fisheries and forestry; in housing; 
in wholesale and retail distribution; in manufacturing,
especially of inputs to rural enterprises and of non-mineral
primary commodities; in health care; in savings and credit,
banking and insurance. The dimensions will be examined in the
relevant parts of the following chapters.

   Finally the international co-operative movement has an
internal coherence which renders it a powerful force for
sustainable development. Its base is the individual co-operative
enterprise and its members, who are its owners. These enterprises
are directed and managed in a fully democratic manner, with full
opportunities for participation by all. In many cases individual
co-operative enterprises join with others to form a business
group: frequently, such groups include considerable numbers of
individual co-operatives. Again, the group is directed and
managed, its business goals and practices are controlled, by
representatives of the member enterprises in a fully democratic
manner.

   Individual co-operative enterprises and groups are members of
representative and service organizations which may be formed
within a single region, representing all co-operatives, whatever
the economic sector in which they are engaged. Such organizations
may also be organized by sector, including all relevant co-
operative enterprises and business groupings at the national
level for that sector. In almost all countries all co-operative
enterprises and groups, as well as their regional and sectoral
representative organizations, are members of a national level
federation. All of these types of representative organization are
organized and controlled democratically by their member
enterprises and groups. They provide various services to their
members as well as represent them in relations with Governments,
other representatives of the private sector, and of civil
society. For this purpose such representative organizations
establish specialized institutions, such as education and
training, research and development, and common business services.

    In most countries there are departments of co-operative
studies and economics in universities and technical training
institutions, and there are governmental agencies concerned with
relations between the public and the co-operatively organized
segment of the private sector.

   Organizations operating at the national level are members in
turn of international alliances, some operating at regional and
sub-regional levels, and some at the sectoral level - such as the
World Council of Credit Unions. However, all are also members of
global level co-operative representative and service
organizations of which the predominant organization is the
International Co-operative Alliance. This has regional offices
and specialized bodies and committees concerned with sectoral co-
operative movements and common issues. Specialized bodies include
the ICA Agricultural Committee; the International Committee of
Industrial, Artisanal and Service Producers' Co-operatives; the
ICA Consumer Committee; the ICA Fisheries Committee; the ICA
Housing Committee; the International Co-operative Banking
Association; the International Co-operative Energy Organization;
the International Co-operative and Mutual Insurance Federation;
the International Organization for Consumer Co-operative
Distribution Trade and the International Co-operative and
Associative Tourism Organization. ICA is giving consideration to
the establishment of a specialized body dealing with health co-
operatives.  Specialized committees include the International
Committee for Training and Education of Cooperators, the ICA
Communications Committee, the ICA Women's Committee and the Co-
operative Research, Planning and Development Committee.

   All these international organizations meet regularly to allow
their members to decide democratically upon policies.    These
organizations enjoy special relations with other international
organizations, such as those representing farmers' organizations,
trade unions, employers' associations, consumer organizations and
women's organizations. They also have special relationships with
intergovernmental bodies, including those within the United
Nations system.

   The global dimensions, democratic structure and coherence of
this international co-operative movement make it a most important
partner for the United Nations system in its task of carrying out
the agreements reached at the Rio Conference.

F.  Structure of the examination of the contribution of
    co-operative enterprise and the international co-operative
    movement to sustainable development

    After a first chapter in which the development of an
environmental strategy within the international co-operative
movement will be examined, this background information paper will
examine the question in respect to each of the chapters of Agenda
21. However, certain of the chapters of Agenda 21 will be grouped
together in a single chapter of this report where their subject
matter is closely related, at least in the context of examining
the relevance of co-operative enterprise to their proposals. 
Chapter 3 of Agenda 21 on combating poverty will be divided into
a rural and an urban component. The order of consideration of the
topics to which Agenda 21 devotes a separate chapter differs from
that adopted in the present report, in order that the nature of
the contribution of co-operative enterprise, actual and
potential, may be made clearer. However, titles of chapters and
sub-chapters will refer to the structure of Agenda 21 and the
relevance of the present review to the issues addressed by Agenda
21 will be made clear throughout.

   A first group of chapters in this report will examine issues
of a primarily rural nature (chapters II - VIII):  a second group
will examine those of particularly urban significance (chapters
IX - XIII).

   A third group of chapters will examine the issues of health,
women, children and youth and demographic dynamics (chapters XIV-
XVII).

   A fourth group will consider the questions of education and
training, awareness and empowerment (chapters XVIII and XIX). 
A fifth group will consider technical assistance and
international trade (chapters XX and XXI), and a final group will
consider organizational and institutional issues (chapters XXII
and XXIII).

                            NOTES
                           ------
 1/  Communication from ICA, April 1995.
 2/  Review of International Co-operation, vol. 86, No. 4
     (1993), pp.76-84.
 3/  Review of International Co-operation, vol. 83, No. 2
     (1990), p. 80.
 4/  Review of International Co-operation, vol. 86, No. 4
     (1993), pp. 71-75.
 5/  Review of International Co-operation, vol. 83, No. 2
     (1990), p. 96, and communication by March 1994.
 6/  Communication from ICA, March 1994.
 7/  Communication from ICA, March 1994.
 8/  Communication from ICA, March 1994.
 9/  Communication from ICA, April 1995.
10/  Communication from ICA, March 1994.
11/  Statistics from ICA and United Nations Population Division.
12/  Review of International Co-operation, vol. 87, No. 2
     (1994), p. 84.
13/  Review of International Co-operation, vol.83, No. 2 (1990),
     p. 46.
14/  Communication from ICA Regional Office for West Africa, May
     1994.