Part I -- Introduction (1966)

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      This document has been made available in electronic
     format by the International Co-operative Alliance (ICA)  
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                       September, 1986

          (Source:  Report of the 23rd ICA Congress at Vienna, 
                    5-8 September, 1966, pp.154-160)           
      
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                         Part I - Introduction
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a.   Composition, Meetings and Procedure of the Commission
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     The Commission on Co-operative Principles was set up, at the
request of the International Co-operative Congress at
Bournemouth, 1963, by a resolution of the ICA Central Committee
which met at Belgrade from the 3rd to 5th October, 1964.

     On the recommendation of the Executive Committee, the
Central Committee appointed five members to serve on the
Commission as follows:

Mr.A. Bonner             Senior Tutor, Co-operative College, Co-
                         operative Union Ltd., Great Britain and
                         Ireland.

Mr. Howard A. Cowden     Member, Board of Directors, Co-
                         operative League of the USA.

Professor Dr. R. Henzler Director, Institute of Co-operation,
                         University of Hamburg.

Professor D.G. Karve     Chairman, ICA Advisory Council for
                         South-East Asia.

Professor I. Kistanov    Professor, Economics and Co-operation,
                         Moscow Institute of People's Economy.

     In December 1965, Professor Kistanov, acting on medical
advice after a severe illness, did not attempt the journey from
Moscow. His colleague, Professor G. Blank, Head of the Department
of Economics, Moscow Co-operative Institute deputed for him at
this and at subsequent meetings.

     The Commission held its first meeting at the Headquarters
of the ICA in London on the 15th and 16th December, 1964.
Professor D.G. Karve was elected Chairman, to preside over the
meetings and deliberations of the Commission throughout.

     Secretarial services, it was decided, should be provided
from the Secretariat of the ICA under the direction of the
Director Mr. W.G. Alexander, who should enlist the services of
a rapporteur to assist him in the drafting of the Commission's
report. Accordingly, Mr. W.P. Watkins, formerly Director of the
ICA, was commissioned to undertake this function.

     The plan of work of the Commission provided, first, for the
collection and analysis of information relating to the present
observance of the Principles of Rochdale as formulated in the
report adopted by the ICA Congress at Paris in 1937. It was
agreed that this purpose would best be achieved through the issue
of a questionnaire to the ICA's affiliated organisations, as well
as to selected non-member organisations and individuals well-
known for their wide acquaintance with the Co-operative Movement
and their acknowledged position as exponents of co-operative
ideas. On the basis of proposals submitted by members of the
Commission, a questionnaire was drafted by the Secretariat and,
after approval by the Commission, was circulated on 1st June,
1965.

     The final date for the receipt of replies by the Secretariat
was fixed at 31st August, 1965. Although a large number of
replies were received by that date, many others continued to
arrive in succeeding months until the total actually exceeded
100. As they were received, replies were copied, translated when
necessary, and circulated to the members of the Commission. The
information, opinions and fresh suggestions they contained
represented a large sample of the ICA's affiliated organisations,
a number of which brought their own affiliates into consultation.
This material gave the Commission a useful insight, not only into
the extent to which the Rochdale Principles were actually
observed at the present day, but also into the reasons why co-
operatives of different types considered it impossible or
inexpedient in certain cases to apply them in practice.

     The Commission held a second series of meetings, partly at
Helsinki from the 18th to 22nd September, and partly at Moscow
from the 24th to 26th September, 1965. As Helsinki was also the
venue of the Central Committee of the ICA, it was possible to
arrange a number of interviews at which the commission was able
to hear the opinions of leading Co-operators from American, Asian
and European Co-operative Movements on questions which ranged
over the whole field of its investigation. At Moscow the
Commission had the advantage of a meeting with the President and
Board of Centrosoyus, and of hearing their explanations of
various features of Co-operative activity in the USSR.

     The Commission entered upon its own discussion of its
approach to the study of Co-operative Principles against the
background of contemporary economic and social life and on the
significance of the seven principles defined by the Report of
1937. These discussions, begun at Helsinki, were continued in
Moscow.

     While in Helsinki, a further request was communicated from
the central Committee that the Commission should endeavour, by
all means, to complete its work in time for its final report to
be discussed by the next International Co-operative Congress at
Vienna in September 1966. To enable the Commission to fulfil the
Central Committee's request, it was agreed to hold meetings in
December 1965 and February, 1966.

     The analysis of the replies to the questionnaire was
completed by the Research Section of the IC_ Secretariat in
November 1965 and made available to the members of the Commission
before the third series of meetings was held at ICA Headquarters
from the 12th to 16th December, 1965., As the Commission had the
benefit of studying the originals, summaries and analyses of the
replies to the questionnaire, it was in a position to take
decisions after dull deliberation regarding the retention,
reformulation or rejection of the Principles adopted in 1937,
together with any suggestions for additional principles offered
for its consideration.

     The draft report was completed and dispatched to the members
before the end of January in time for consideration at its fourth
series of meetings in London from the 14th to the 18th February,
1966. At this meeting the final report of the Commission was
unanimously adopted.

     The Commission would like to place on record its sense of
obligation to the large number of co-operative organisations and
individual co-operators who readily and unreservedly placed their
information and views at its disposal. The trouble which some
among them took to respond to our invitation to meet us in
Helsinki and Moscow is deeply appreciated by us. In Finland, UK
and USSR, the National Co-operative Unions, and some of their
affiliated organisations, were good enough to offer cordial
hospitality which enabled the Commission to broaden its
understanding of conditions and views of the respective co-
operative movements.

     Mr. W.P. Watkins, former Director of the ICA, who accepted
the Commission's invitation to act as Rapporteur helped the
Commission in several ways. The efficiency and the speed with
which he prepared drafts of the Report for the Commission's use
were indeed very remarkable. Without his assistance in this
respect, it would have been well nigh impossible to produce the
report within the limits of time desired by the Central Committee
of the ICA.

     Mr. W.G. Alexander, who had been good enough to accept the
Commission's invitation to act as its Secretary, in addition to
his heavy duties as Director of the ICA, has borne a very heavy
burden, administrative as well as deliberative, cheerfully and
most fruitfully. The Commission would like to make special
mention of Mr. Alexander's contribution towards the timely and
satisfactory results of the Commission's work.

     Staff and assisting members like Mr. I. Williams, who
recorded a verbatim statement of the deliberations, Mr. V.
Kondratov, who helped with Russian interpretation and Mr. J.H.
Ollman and Mrs. L. Stettner of the ICA Office, along with other
members of the ICA staff, have helped in their respective
positions very materially towards organising the Commission's
work. The Commission's best thanks are due to all these.

b.   Terms of Reference
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     The objects and scope of the Commission's investigation were
first indicated in the resolution adopted by the Bournemouth
Congress in the following terms:

     "The Congress requests the Central Committee:

     To constitute an authoritative commission to formulate the
     fundamental principles of activity of co-operation under
     modern conditions;

     To empower the Commission to study which of the principles
     of the Rochdale Pioneers have retained their importance to
     the present time; which of them should be changed and how,
     in order to contribute in the best manner to the fulfilment
     of the tasks of the co-operative movements and, finally,
     which of them have lost their importance and should be
     substituted by others;

     To empower the Commission to formulate new principles of
     co-operative activity;

     To include in the Agenda of the 23rd Congress of the
     alliance consideration of new principles for the activity
     of the Co-operative Movement;

     To empower the Executive to request the national co-
     operative organisations, members of the ICA, to send their
     proposals on this subject;

     To ask the Central Committee to consider the proposals of
     the national co-operative organisations and those of the
     Commission at a meeting preceding the 23rd Congress and to
     submit its opinion to the Congress."

     To ask the Central Committee to consider the proposals of
     the national co-operative organisations and those of the
     Commission at a meeting preceding the 23rd Congress and to
     submit its opinion to the Congress."

     The Central Committee, after considering the request of
Congress, adopted a resolution providing for the constitution and
administrative arrangements for the Commission and stating its
terms of reference in para 4, which runs:

     "4.  The task of the Commission shall be:

     To ascertain how far the Principles of Rochdale - as
     defined by the ICA Congress at Paris in 1937 - are observed
     today and the reasons for any non-observance;

     To consider in the light of the results of the foregoing
     study, whether the Rochdale Principles meet the needs of
     the Co-operative Movement having regard to the present-day
     economic, social and political situation or whether any of
     the Principles should be reformulated in order the better
     to contribute to the fulfilment of the aims and tasks of
     the Co-operative Movement in its different branches;

     if so, to recommend a new text of texts."

     The first part of the Commission's task, as will be seen
above, was to enquire into the present-day observance of the
Principles of Rochdale and into the reasons for any non-
observance disclosed by its enquiries. It was in order to enlist
the assistance of interested Co-operative Organisations,
especially on this part of the Commission's terms of reference,
that the questionnaire already mentioned was framed and
circulated.  Their answers, summarised and tabulated by the ICA
Research Section will become generally available in due course.

     The replies to the questionnaire provided only part of the
basis for the Commission's findings and judgement, which also had
to depend largely on the studies and experiences of its members.
The whole body of material received from correspondence was
contributed entirely voluntarily, and a number of organisations
brought their own affiliates into consultation before submitting
their replies to the Commission. The material thus represented
a large sample and its value for purposes of information and
illustration was very considerable.

     Even more valuable was the evidence, given by the replies,
of the great extent to which Co-operators all over the world,
irrespective of the type of co-operative organisation to which
they are attached and its economic and social environment, posses
a common co-operative philosophy, from which they derive common
sentiments and attitudes to basic problems greatly outweighing
their inevitable diversities of objectives and method. A further
result was to reveal the historical continuity which connects the
pioneers of Co-operation in the early stages of the Industrial
Revolution of the 19th century, even before the Rochdale
Pioneers, with the pioneers of the newly developing regions of
the 20th. This made the Commission's tasks of answering the
question, whether the Principles of Rochdale meet the needs of
the Co-operative Movement today, much easier than it might have
been. The task proved to be one, not so much of revision, as of
clearing up confusion and removing unnecessary rigidity rooted
in unbalanced or over-simplified interpretations, in other words,
a process of re-burnishing which permits the underlying
principles to shine with a brighter light.

c.   Historical Background
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     The Resolution of the Bournemouth Congress which called for
the present investigation was adopted by an overwhelming
majority. The need for a review of the Principles of Co-operation
was recognised from several standpoints. Far-reaching changes had
occurred in the political constitution and economic organisation
of nations. Under the stress of a revolution in distributive
trade many co-operative organisations encountered difficulties
in maintaining their traditional practices. In the newly-
developing regions of the young co-operative movements had still
to reach their full capacity to implement the Movement's
principles and apply them in their special economic and social
setting.

     Compared with the Special Committee of 1930-37, the
Commission has been working in greatly altered circumstances.
Although the basic problems may appear to be essentially the
same, namely, to maintain the Co-operative Movement's autonomy
vis-a-vis political parties and governments; to correct
tendencies to compromise on principles for the sake of business
advantage; to clarify the essential differences between true co-
operatives and other enterprises apparently imitating co-
operative methods to stress the vital necessity of keeping the
Movement's democratic machinery and its educational system up to
date, they were posed in different forms and with somewhat less
urgency thirty years ago. The general situation was less dynamic
than it is today. The main work of that Special Committee was not
merely to clarify, but also to reaffirm the principles handled
down from the Movement's pioneer days. The International Co-
operative Alliance itself was smaller in respect of its total
membership and mainly dependent for support on consumers' Co-
operative Movements in Europe, a fact which was bound to
influence the outlook of the Special Committee and the focus of
its interest.

     Even during the Second World War the Co-operative Movement
played an important part in the economic life of many countries.
After the fighting ended and the work of national and
international reconstruction began potentialities of co-operative
organisations for economic and social reorganisation became more
widely recognised in all countries irrespective of their economic
and social systems.

     Meanwhile important changes have taken place in technology
and especially management. The world appears to stand on the
threshold of a new industrial revolution even more comprehensive
than the old. The function of Co-operative Organisations,
therefore, is more than the defence of group interests; they
should be making a positive contribution to the welfare of their
participants in an expanding economic system. The needs of co-
operatives for large masses of capital and for trained man-power
will therefore grow, though capital used by them will not
dominate but only earn its fair interest. Again, in the
development over a long period of large-scale business
undertakings with many ramifications, an intricate form of
organisation is necessary, in which too absolute interpretations
of principle are not appropriate. The Movement cannot remain
content for the future. This consideration is as important for
the newly-developing countries as for the more advanced, for
wrong applications of principle may not only hinder the
Movement's progress but produce results with Co-operators do not
desire. They must recognise that involvement in public policy and
in other sectors of the economy than their own is inevitable, and
they would be mistaken to wish it otherwise.

     As the awareness of the demands of the new era into which
the movement is passing has spread amongst Co-operators, they
have reacted at every level - local, national and international.
Structural changes involving far-reaching consolidation,
concentration and integration have already been made in a number
of national Co-operative Movements; more are contemplated. In the
last five years, these changes have been the subject of study and
exchange of ideas in the Authorities and the Auxiliary
Organisations of the International Co-operative Alliance. But as
they carry through their measures of reconstruction many leading
Co-operators feel with greater urgency the need for guidance in
matters of principle - the need to distinguish what is essential
and must be maintained at all costs from what may be varied,
discarded or added, according to circumstances. They also feel
the need of making firmer the common intellectual and moral
ground on which Co-operators of all nations, of all schools of
thought, of all branches of the Movement, can unite. The work of
the Commission therefore takes into account the structural
transformations now in progress and proposed for the future.

d.   The Commission's Analysis and Approach
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     The Co-operative Movement is world-wide. The International
Co-operative Alliance is becoming steadily more and more
representative of it. Although co-operative organisations of many
countries in Africa, Asia and Latin America have yet to join it,
the Alliance grows in membership from year to year and its
membership becomes better balanced because it is more inclusive
of the diverse types of co-operative society. Consumers' and
agricultural co-operatives still greatly predominate, as is
inevitable, but it is significant that a growing number of unions
and federations operating in the field of credit, housing,
fisheries, etc. are being admitted. Sharp divisions formerly
existing between co-operatives of various types can no longer be
maintained. In the newly-developing regions especially, multi-
purpose societies tend in several cases to replace co-operatives
of specialised types which may be too small or otherwise
ineffective.  More important still is the fact that despite the
obvious differences between the economic and social systems under
which co-operatives carry on their work, the Alliance maintains
its unity, as the only international organisation dedicated
entirely and exclusively to the propagation and promotion of Co-
operation.

     The Commission, in its approach to its tasks has been
profoundly influenced by its awareness of these facts. On the one
hand, it felt bound to recognise that the practices of co-
operative organisations must needs vary, in ways too numerous to
mention and with considerable differences of emphasis, not only
according to their purpose and type, but also according to the
environment in which they have to further their members'
interests and survive. On the other hand, there must necessarily
be common elements from which they derive the resemblances which
prove their membership of the co-operative family. This or that
branch of the Co-operative Movement may have specific principles
which are of minor importance to others, but the Commission
considered that principles which are of minor importance to
others, but the Commission considered that its primary task was
to attempt to formulate those general principles which could and
should be observed by co-operatives of all types in all social
and economic systems.

     It has already been remarked that the ICA Special Committee
in its Report of 1937 may have been influenced to a certain
degree by the composition of the Alliance at that time. This
notwithstanding, the principles it enumerated were intended to
apply universally to co-operatives of all kinds at all times and
places. The Commission, therefore, took this Report as its
starting point, as requested by its terms of reference, and based
its discussion on the principles formulated therein. Since
experience has shown that too brief or simple a formulation can
be misleading, the Commission has deliberately chosen, at the
risk of being no longer and more qualified in its statements, to
bring out the full implications of its thought on any given
topic.

     Moreover, it has endeavoured at all times to bear in mind
the point of view of practical co-operators, emphasising in many
cases the spirit rather than the letter of principle. It has
preferred to keep in the foreground the consideration that, in
varying contexts and historical circumstances, different aspects
of Co-operation receive varying degrees of emphasis and that
innumerable groups of Co-operators in their own environment have
been trying out how best to attain the ultimate goals of the
Movement. What the Commission has considered important was not
so much the verbal or semantic formulae as the substance of these
objectives.

e.   Co-operative Principles and Ideals
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     It is also in relation to these objectives that the
Commission framed its working definition of Co-operative
Principles as those practices which are essential, that is
absolutely indispensable, to the achievement of Co-operative
Movement's purpose. This purpose has been described in various
ways at different stages of the Movement's historic development.
The Rochdale Pioneers, like some of the Co-operators who preceded
them, declared their aim to be the establishment of communities
supporting themselves by their own labour on their own land. For
the most part, the Movement did not advance along this line of
intensive development but developed extensively, by spreading out
geographically and by breaking into one field of economic
activity after another. Its success encouraged many to visualise
its ultimate end and ideal as a Co-operative Commonwealth. At a
later stage again, and with broader experience, many Co-operators
became content to accept the less ambitious ideal of a Co-
operative Sector complementary to, but exercising an influence
upon, the public and private sectors of the economy.

     The common element at all times has been that Co-operation
at its best aims at something beyond promotion of the interests
of the individual members who compose a co-operative at any time.
Its object is rather to promote the progress and welfare of
humanity. It is this aim that makes a co-operative society
something different from an ordinary economic enterprise and
justifies its being tested, not simply from the stand point of
its business efficiency, but also from the standpoint of its
contribution to the moral and social values which elevate human
life above the merely material and animal.

     It follows from the standpoint adopted by the commission
that no distinction of degree of validity can be drawn between
essential principles. The Commission has not given some
principles a higher priority than others. On the contrary, if
every principle denotes something essential, all posses equal
authority and the essential substance of all must be equally
observed to the full extent and in the manner that circumstances
permit at any time and place. This qualification is inevitable
in the application of theoretical principles which have to be
effective in a variety of circumstances. The Commission has done
its work in the hope of arriving at formulations of essential
values in Co-operation which will supply meaningful
interpretations and guidance to Co-operators who have to meet the
challenge and grasp the opportunities of the modern world._