Revision of Co-op Principles and the Role of Co-operatives in the 21st Century

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    This document has been made available in electronic format
         by the International Co-operative Alliance ICA 
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                         June 1995

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                      Revision of Co-op Principles
                    and the Role of Co-operatives
                        in the 21st Century
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                    by Hans-H. Muenkner*


Why revise the current list of co-op principles of the ICA?

Are co-operative principles standing hard and fast as a
bulwark in a changing world? Should co-operative principles be
revised because they have outlived their purpose? Will
co-operatives die out like dinosaurs which lose their living
space in a changing world unless they adapt themselves to
their new environment? Is it possible to change the principles
of co-operation without losing the identity of co-operatives?
Will revision of the co-operative principles also mean to
change the well-known and tested model? 


The answer to all these questions is no.

"Modern co-operatives" were invented in the middle of the 19th
century in times of the Industrial Revolution as a form of
organization enabling people to cope with rapid and
far-reaching social , economic, political and technological
change. The 21st century will also be a time of rapid change
in all these fields aggravated by additional, serious
ecological problems.

The hypothesis of this paper is that the general ideas behind
the concept of co-operation, the principles guiding
co-operators to do the right things and the basic
organizational pattern appropriate to pursue the typical
co-operative objectives, are valid independent of time and
circum-stances, whereas the practical rules of application are
not.

The call for revising the co-operative principles is partly
caused by the impression that important principles are lacking
in the ICA list and partly by misunderstandings of differences
between values, principles and practices. 

Accordingly, the topic will be dealt with in three steps:

-    An attempt will be made to clarify the still rather
     confused issues of what a co-operative is and what are
     the values, principles and practices of co-operation;

-    the changes that have occurred in the environment of
     co-operatives will be analysed; and

-    it will be discussed, how co-operatives can adjust
     themselves and react to these changes, trying to find
     solutions by offering ways and means which enable people
     affected by the changes to use the co-operative approach
     or form of organization to improve their conditions, to
     cope with problems threatening them, for which neither
     the market nor the state appear to offer solutions.

Ostensible and real need for revision of co-operative
principles

For decades, co-operative enterprises have pursued the
policies of surviving on the market in full competition  with
commercial firms by imitating the business policies of their
competitors, The slogan has been: "grow or perish". Yet, many
large co-operatives have perished despite growth or because of
uncontrolled growth, overstretching their resources and
capabilities.

What is obvious in its extreme form is less visible, if this
policy is implemented in small steps, which, however, all go
into the same direction.

Attempts  to adjust the co-operative model and particularly
the co-operative law to the needs of survival of co-operative
enterprise in a highly competitive market, having mainly been
directed towards overcoming "structural weaknesses" of the
co-operative form of organization, (which could also be seen
as typically co-operative sources of strength) which means in
clear terms by bringing the co-operative model closer to the
company model.

This refers to:

-    Opening new ways of raising capital from members and
     non-members and ultimately from the capital market, e.g.
     making co-operative shares more attractive for investors,
     giving capital a more powerful position in the
     co-operative;

-    giving board managers more autonomy to manage the
     co-operative enterprise without too much interference
     from the membership in general meeting or their elected
     representatives;

-    recruiting external professionals (non-members or
     proforma members) to serve on the board of directors,
     because there are no sufficiently qualified managers
     within the co-operative group (which may be true - but
     there are qualified elected leaders who can determine the
     overall policy of their co-operative and ask the
     professionals to execute this policy service of genuine
     member representatives on the board and professional
     managers employed by the board);

-    facilitating amalgamation into large societies rather
     than propagating functional integration or networking
     among smaller societies;

-    auditors of co-operatives concentrating on financial
     audit of the company style rather than on specifically
     co-operative "performance audit" or management audit in
     relation of achieving the objective of member promotion;

-    practicing business with non-members as an important and
     indispensable part of co-operative business, thereby
     levelling the differences between members and ordinary
     customers, leaving dividend on share capital as the main
     incentive for membership, like in companies;

-    accepting taxation laws which treat special services or
     conditions offered exclusively to members as hidden
     profit distribution, taxed accordingly.

The question is whether these adaptations to the company model
are necessary and useful or whether they lead into a wrong
direction, namely, to level the characteristic features of
co-operative enterprises turning them into ordinary business
firms.

Originally, co-operative societies were self-help
organizations, with members in charge of setting the goals for
joint action, determining the rules to be applied and
controlling the elected leaders democratically.

These characteristics of co-operative societies as autonomous,
member-controlled self-help organizations for satisfying
members' needs are not expressly stated in the current list of
co-operative principles of the ICA. The reason for this
omission may be a hidden agenda, namely that in the former
Socialist countries and in the developing countries
co-operatives were not perceived as autonomous self-help
organizations, but rather as instruments for the
implementation of centrally planned programmes and projects.

With the political changes that have occurred during the past
several years in the former Socialist countries and the
disappointing results with State-controlled
pseudo-co-operatives in developing countries, the character of
co-operatives as self-help organizations and the need to
grant them autonomy in running their own affairs is now
generally recognized. It would, therefore, be appropriate to
express this reorientation towards the original concept of
co-operation in the list of principles by adding autonomy and
member-promotion to this list.

Another problem area which has been left unsettled for the
sake of harmony in the world co-operative movement is the
question of priority of goals in co-operative societies. Shall
co-operatives serve first and foremost their members, who
finance, control and use their joint co-operative enterprises
or shall co-operatives serve more general purposes, the
welfare of the general public (like in the Maharashtra
Co-operative Societies Act of 1960 and the Singapore
Co-operative Societies Act of 1979), the economy of the
nation, social justice, peace etc., in which case
co-operatives may need to seek public funds, which in turn
would justify government control over the proper use of such
funds.

This is certainly not a matter of either - or - but clearly
one of priority.

Experience has shown that the individual person is more likely
to join a co-operative society voluntarily, to commit his or
her resources, to remain a member and to participate actively
in the joint undertaking, if he/she can receive visible and
tangible results in return (if there is member satisfaction).
The strongest, most convincing and most reliable incentive for
members in co-operatives is the expectation (and better still
the experience) that one's own problems can best be solved
co-operatively. Members may decide to have other priorities
for their co-operative, if they are unselfish, socially-
oriented and wish to express their solidarity with others who
need help. But this is not the standard form of members'
behaviour and should therefore not be seen as a co-operative
principle.

Hence, in a realistic set of co-operative principles taking
account of the "weaknesses" of the human being, to think of
his or her own immediate problems first, without losing the
responsibility for the community, for the world and for the
future generations from sight, a new co-operative principle
should be added to the list to put the priorities right, e.g.
under the heading "community responsibility" and as the last
principle: "Co-operatives recognize their community
responsibility". While focusing on members' needs, they
respect and protect the global environment and serve the
interests of their communities through democratically
approved policies.

Furthermore, a definition of a co-operative society, which
should precede the list of co-operative principles, should
make reference to the self-help character of co-operative
societies.


Need for a clear distinction between co-op values, principles
and practices 

Recent attempts of the ICA to define co-operative societies by
the general ideas on which the concept of co-operation is
based, by the typical co-operative value system, by the
principles which co-operators should use as guidelines for
their co-operative activity, have not contributed to
clarification of these issues but rather increased the
confusion.

In order to arrive at a clear concept of co-operation, a
definition is required to determine what a co-operative
society is or should be and there is almost general consensus
that such a definition is given in Recommendation 127 of 1966
of the International Labour Conference concerning the role of
co-operatives in the social and economic development of the
developing countries.

A co-operative society "is an association of persons, who have
voluntarily joined together to achieve a common end through
the formation of a democratically-controlled organization,
making equitable contributions to the capital required and
accepting a fair share of the risks and benefits of the
undertaking in which the members actively participate" (para
12 (1) (a)).

This definition covers all:

-    the typical co-operative philosophy (values and
     principles) and
 
-    the typical co-operative structure.

When trying to define the general ideas behind the
co-operative concept, it is necessary to go back to the past
in order to develop a clear vision for the future.

Co-operatives were invented as organizations having a high
potential of innovation in times of rapid change, just like
companies were invented as a form of organization allowing to
accumulate large sums of money for investment from anonymous
sources (hence the French name "societe anonyme"). They are a
form of organization allowing people to pool resources (other
than capital), turning a multitude of small potentials into a
force to reckon with (on the market and in political debate).
They are a means individuals can use to gain access to new
ideas, new technology, opportunities, institutions, which the
individual acting alone would never have. Co-operatives offer
protection within a group of persons having common needs and
aspirations, making it possible to try innovations even
against the general trend.

Co-operatives are a tested model of organized collaboration,
offering a set of rules which make it possible to reconcile
conflicting elements in a well-balanced synthesis, that
usually create conflicts in society:

     freedom and dependence,
     tradition and progress,
     individual self-reliance and group solidarity,
     egoism and social responsibility.

Some of these general ideas behind the concept of co-operation
are identical with basic human rights:

Freedom of association, i.e. freedom to work together with
others on a voluntary basis, for every lawful, self-determined
purpose as long as such co-operation is felt to be useful and
beneficial and does not encroach on the rights of others.

Protection of private property, including the right of the
individual to pool any part of his or her property in a group
and to keep private property in form of individual businesses
or households, using co-operatives for certain services only
or to pool all their property creating a collective.
Experience has shown that service co-operatives are more easy
to form and operate than collectives.

Equality of all human beings without discrimination by creed,
race or sex.

Freedom to contract, i.e. to make legally-binding decisions
within the limits of the general law, to create self-imposed
obligations under agreements or by-laws of organizations.
Protection of these rights under law and access to independent
courts if these rights are infringed.

This enumeration shows that co-operative ideas were certainly
influenced by the Declaration of Human Rights during the
French Revolution and by the Constitution of the United States
of America.

Persons who accept the co-operative way of doing business, who
agree with the general ideas of the co-operative concept and
accept these ideas as orientation for their way of thinking
and acting, turn a combination of abstract general ideas into
their personal co-operative value system.

Co-operators believe in self-help, mutual assistance, group
solidarity, equity, social justice and social responsibility
with varying interpretation and emphasis on one or the other
of these ideas. They organize their relationship with their
co-operative society and with other members of the
co-operative group and often even their way of life, on the
basis of this value system. These general ideas have been
transformed by co-operators into a set of specifically
co-operative guidelines according to which the typical
co-operative structure is filled with life. The combination of
these guidelines forms a system with individual guidelines
sometimes reinforcing, sometimes restricting each other: The
co-operative principles.

Approach to revision

When looking at the ICA list of co-operative principles, it
can be observed that the list is incomplete and to some degree
incorrect.

Some important principles are missing, while rules of
practical application were included, although they are
variable practices.

Additions to the list of principles

The need to add self-help, mutual assistance and member
promotion on the one hand, and autonomy of co-operatives being
private self-help organizations on the other to the list of
principles has already been discussed.By these additions in
future State- or party-controlled co-operatives and general
interest enterprises can be longer be counted among
co-operatives and are clearly not covered by the co-operative
principles.

It is contemplated to add still another principle to the
official ICA list: community responsibility.

This principle could help to diffuse tensions which may arise
within the international co-operative movement, if self-help
is included but solidarity and social responsibility are not.
The advocates of co-operatives as self-help organizations
believe that co-operatives have to serve the interest of their
members and not of anybody else. Others believe that
co-operatives have a responsibility not only for their
members, but  also for the community in which they work and in
general for the well-being of mankind - a view expressed by
the ICA Commission on co-operative principles in 1966 in very
strong terms.

This issue is becoming increasingly important in view of the
globalization of problems like deterioration of the
environment, social inequalities, spread of worldwide
diseases, which threaten not only the individual members of
co-operatives, but the entire world population. Such problems
cannot be solved by individuals or local groups and not even
by national States, but only on a global level.

However, co-operatives concentrating their efforts on
community or global issues may find it difficult to attract
members willing to make personal contributions to a common
cause without receiving direct personal rewards. The idea of
community responsibility may need to be propagated through
co-operatives, by making their members aware that all are
sitting in one boat and only if every individual changes
his/her lifestyle and becomes conscious of his or her
community responsibility, these global problems can be tackled
and eventually solved.

This is why the following "new" co-operative principle is
proposed, which is not really new because it has always been
implied, but which would be given more emphasis if expressly
stated as follows:

"Co-operatives recognize their community responsibility. While
focusing on members' needs they respect and protect the
global environment and serve the interests of their
communities through democratically approved policies".

Changes of the environment in which co-operatives have to
operate 

At the turn of the millennium the world is facing problems of
a hitherto unknown, global dimension. It is no longer possible
for any group of people or for any nation to concentrate on
solving its own problems in isolation. The interdependence of
all inhabitants of our globe is becoming more and more
obvious. All are affected and all have to react to problems
like changes of climate, pollution of water, soil and air,
globally spreading diseases like cancer and Aids and poverty
or political unrest, forcing millions of people to leave their
homes and to migrate to places where they expect better living
conditions.

The most important changes that have occurred and are still
occurring in a worldwide dimension are of political,
demographic, social, economic, ecological and technological
nature.

Political changes

The most prominent and very far- reaching change in this
category is the decay of dogmatic socialism as a form of
government, with large numbers of public institutions, State
enterprises and collectives in many countries being privatized
or wound up, leaving disoriented, frustrated and impoverished
masses behind. The structural adjustment programmes in many
developing and some industrialized countries, causing hardship
especially to the lower income strata of the population, rate
second. 

Liberalization of the economies with deregulation,
decentralization and the reduction of state interference in
economic affairs, opening chances for enterprises for the
rich, educated and powerful to gain at the expense of the
weak, poor and ignorant - a classical scenario for the
development of co-operatives.

Politicians are becoming increasingly aware of the  need to
pay attention to social and ecological problems of
development, last but not least as a result of activities of
pressure groups and ecological activists turning their protest
movements into political parties.

Demographic change

The world is witnessing two adverse demographic trends which
together accumulate into worldwide problems.

In the industrialized countries, the birthrates are falling
while the life expectancy of old people is growing steadily.
This leads to a situation where a declining number of active
citizens will have to provide social security for a growing
number of senior citizens, who after retirement are entering a
third age which may well last 20 - 30 years. In Germany within
the next 30 years the total of taxpayers and insurance
contributors will be largely outnumbered by old persons
claiming social security payments. What used to be a
population pyramid turns into a population mushroom.

In the developing countries the trend is reversed. In Africa
and many countries of Asia and Latin America, except China,
the birthrate is still at high levels with the majority of the
population being below the age of 20. Instead of successful
birth control, medical progress helps to reduce mortality of
newborn children and to extend life expectancy. The resulting
problems are an increasing scarcity of land, conflicts over
the use of land, soaring urbanization with slum and squatter
settlements around cities like Lagos, Nairobi, Lusaka, Manila,
Bangkok or Rio de Janeiro growing at breathtaking speed.

The uneven distribution of population, wealth and
opportunities, but also internal conflicts and civil wars
cause mass migration.


Social change

Worldwide the decay of value systems can be observed,
reinforced by the demographic development pointed out earlier
and reinforcing demographic imbalances. The family structures,
which for time immemorial have been reliable and effective
systems of social security, are disintegrating. In many
industrialized countries, large, multi-generation families
have long ceased to be the standard structure. Instead,
nuclear families with one or two children are the norm, but
they are already replaced by single households. Under such
conditions, the question of caring for the aged has to be
thoroughly reconsidered.

In the developing countries, the joint family system is still
a strong and reliable social security network, which, however,
starts to show strains, especially where poverty, scarcity of
land and political unrest forces people to migrate, leaving
children, women and old people behind.

Another far-reaching change is occurring with regard to the
role of women, both in families and at the work place. In the
industrialized countries, efforts are made after a long
political struggle to give women equal chances in access to
education, jobs and positions in institutions of any kind.
This trend is favoured by and at the same time reinforces
changes in family structures and has repercussions on birth
rates.

Also in the developing countries the struggle for equal
opportunities for women has been going on for the past several
decades with opposing forces based on tradition and religion.

Economic Change

The most far-reaching economic change is the transition from
centrally- planned economy to market economy following the
collapse of socialist states. In all countries, there is a
growing disparity between the rich and the poor. Even in the
rich industrialized countries uneven distribution of wealth
and growing poverty has reached dimensions unimaginable a few
decades ago. The number of unemployed and homeless people is
growing steadily. In a banking centre like Frankfurt, more
than 30% of the inhabitants (some 650,000 people) are
depending on social welfare payments 11.

The trend to have less but better-paid jobs and to transfer
jobs to countries with lower labour cost, thereby increasing
the number of unemployed people living on social subsidies,
cannot continue much longer without causing serious social
unrest. Therefore, the political and economic actors will have
to seek solutions for a more equitable distribution of work
and wealth.

In the developing countries, mass poverty, high unemployment,
inflation, unfavourable terms of trade for export crops and
the burden of foreign debts give a bleak picture. The
structural adjustment programmes seeking to accelerate
economic growth, increased production and exports at almost
any cost is lacking the social policy element, so much so that
new programmes looking after the social dimension of
adjustment had to be designed. Reductions of investment in
social infrastructure (education, health) in countries which
would urgently need improved economic and social conditions is
not compatible with the requirements of long term sustainable
development 12.

Ecological Change

Pollution of water13, soil14 and air15 has reached dimensions
which can no longer be ignored, neither by the ordinary
citizen nor by the politicians.

Climate changes leading to droughts, forest fires, floods and
typhoons are causing increasingly heavy damages and forcing
people to reconsider their lifestyles and attitudes towards a
more careful use of natural resources.

In the industrialized countries, control of pollution,
prevention, disposal or recycling of waste, use of alternative
and renewable sources of energy and development of appropriate
technologies are in focus, but still far from being high on
the agenda. Measures of making enterprises pay for damage
caused by them to the environment are still not as effective
as they should be.

In the developing countries, desertification due to
monoculture, population pressure, overgrazing, use of
dangerous chemicals as fertilizers and pesticides and the
destruction of forests are the most important ecological
dangers causing and being reinforced by global changes of
climate.

According to the assessment of the FAO and the World Bank the
limits of sustainability of the world ecological system have
been reached or even passed. The following stress symptoms
support this point16:

-    tropical forests are reduced by 11 million ha* per annum,

-    the loss of humus layer on agricultural land exceeds
     regeneration by 26,000 million tons per annum,

-    wrong farming methods turn 6 million ha per annum into
     new desert,

-    thousands of lakes are biologically dead and many more
     are dying,

-    the level of ground water is falling in large parts of
     Africa, China, India, North America,

-    some 1000 species of plant and animal life are extinct
     every year, within the next 20 years one-fifth of all
     known species will have disappeared,

-    the pollution of ground water and its effects have to be
     studied,

-    as to the global climate, the temperature will rise by
     1.5 to 4.5 degrees celsius until the year 2030,

-    the sea level will rise by 1.4 to 2.2 meters by the year
     2100.

Technological Change

The development of global information and communication
networks has brought people closer together, facilitates the
diffusion of information and innovations and allows
communication over any distance.

What has been developed as labour-saving technologies has
turned out to cause mass unemployment, allowing production of
goods and services with a minimum of manpower.

Technological innovations have paved the way to use energy and
raw materials more effectively or to substitute scarce raw
materials by new artificial products. Transport and
communication systems have made it possible to transfer jobs
to places where labour is cheap, to separate production and
assembly plants. Thanks to modern technology fewer farmers can
produce more food than ever before and are even paid by the
State to reduce their production to avoid surpluses. On the
other hand this high productivity is brought about by heavy
use of chemicals which in turn contribute to the pollution of
water, soil and air.

In the developing countries industrial development programmes
are still favouring capital intensive, labour saving
("advance") technologies, although these countries are short
of capital but rich in cheap labour. Appropriate technologies
have been developed for use of solar energy e.g. to cook food
without using firewood17, to catch rainwater to be used during
the droughts, to introduce sophisticated irrigation schemes,
new high-yield varieties of plants; however, all this known
technology is not reaching the masses of the population.

The requisite technology for decentralized systems of energy
supply based on renewable sources of energy has been largely
developed; they are comparatively cheap to manufacture and
skills needed for their operation relatively easy to acquire :

-    Solar thermal conversion (still in development phase),

-    photovoltaic conversion (effective for plants up to 10 KW
     capacity in remote areas),

-    wind energy (e.g. for water pumps),

-    hydro-energy, small hydroelectric power stations (most
     promising method),

-    bio-conversion (most effective method with bio-mass
     production not competing with food production).

However, the dissemination of these technologies is still
limited, because their importance is not sufficiently
recognized by the decision-makers and planners in the
competent authorities. As long as they are not produced in
large quantities, the systems are more expensive than the
(usually subsidized) other sources of energy on the market.
The average low income earner cannot afford to purchase and
install the recommended systems, even though they can supply
the end user with relatively cheap and ecologically safe
energy18.


Roles of Co-ops in the 21st Century

Co-operators and their co-operatives have to react to the
changes of their environment. To ask what co-operatives can do
for their members is asking the wrong question. The right
question is: "how can individuals solve their pressing
problems by way of organized self-help?" As self-help
organizations of their members, the tasks of co-operatives are
to enable their members to solve the problems, which the
members perceive as threatening, by forming or joining co-ops.

In the industrialized countries, many of the difficulties,
which the early co-operators had to face in the last century,
are solved by an existing, well- established and highly
developed system of co-operative societies (some of which show
the described trends towards the company model), but also by
liberal constitutions, guaranteeing human rights, social
security networks, effective labour laws and competition laws,
for which the early co-operators had to fight, and by a
strongly competitive market for consumer goods, services etc.

Today, there are additional problems threatening the
individual citizen and motivating persons to take self-help
actions and form or join co-operative societies.

-    Fighting unemployment by forming self-managed enterprises
     for self-employment or developing innovative forms of
     job-sharing and part-time employment leading to a more
     equitable distribution of work and income; organizing
     community co-operatives, where public funds usually
     provided as unemployment benefits are pooled with the
     work force of unemployed persons to create hybrid forms
     of self-help organizations providing jobs with the  help
     of public funds for carrying out work in the interest to
     the community and for the benefit of the public (e.g. the
     community co-operatives in the United Kingdom or
     co-operatives for social solidarity in Italy)19.

-    Taking joint action against exploding cost of health
     insurance by organizing preventive health care on a
     co-operative basis, while the public and private health
     sector is firmly oriented towards high-tech and high cost
     curative medicare. This could be done by forming medical
     co-operatives employing their own doctors or running
     their own hospitals as already practised in countries
     like Japan, Spain and Singapore.

-    Taking measures against isolation and marginalization of
     a growing number of elderly persons20 without family
     ties, by forming self-help organizations of senior
     citizens in form of service co-operatives, housing
     co-operatives, paramedic centres or other mutual aid
     groups, developing innovative forms of combined savings,
     housing, health care and insurance services which  people
     may use as an alternative for disappearing family
     structures.

-    Mobilizing citizens for joint action against further
     destruction of the environment by giving preference to
     ecologically safe products and technologies, by pooling
     consumer power through consumer co-operatives,
     shareholders' associations and pressure groups to force
     producers for consumer goods to adopt ecologically sound
     production methods.

-    Promoting the use of renewable sources of energy by
     encouraging research, production and sale of appropriate
     technology through industrial co-operatives, consumer
     co-operatives and specialized service co-operatives.
     (e.g. the use of electric delivery vehicles by Co-op
     Kanagawa, Yokohama).

-    Avoiding or recycling waste as a branch of activities of
     consumer co-operatives or special recycling
     co-operatives.

-    Forming agricultural co-operatives for ecologically-sound
     production of food and cash crops.

In all these fields co-operators could empower their
co-operatives to assume the role of innovators. While
commercial competitors would primarily ask whether such
innovations are profitable, co-operatives could opt for
entering a new field if it would provide long-term benefits to
the members and to the community, provided it would be
economically feasible.

If they want to become the forerunners in the post-industrial
society, co-operatives will have to invest in member
information and education and in new ecologically-sound
technologies. Their membership base gives them the potential
to initiate changes, if such innovations are effective in
improving the living conditions of their members and their
families in the long run. Of course, co-operatives, like any
other enterprise, will need funds to finance their operations.
However, organizations built on the principle of deliberately
limiting the power of capital, cannot expect much from
external investors. Whether or not innovations in
co-operatives can be undertaken and financed, will largely
depend on the capability of leadership and management to
mobilize members' resources.

Members will be prepared to make more than symbolic capital
contributions and pay the price for new services of their
co-operative, if the benefits resulting from these innovations
are real and convincing. Members will determine the chances
and the limits of co-operative activities. Without member
support or against the resistance of members, such innovations
could not and should not be made.

In the developing countries, co-operatives in the 21st century
will play their classical roles known in the industrialized
countries during the 20th century : supply, marketing, savings
and credit, consumer, housing, transport, insurance, wholesale
and retail trading, services of any kind, industrial
co-operatives etc. But they will also have to cope with
problems of high unemployment, degradation of the environment,
introduction of new technologies and providing substitutes for
a decaying system of family-based social security in form of
new social networks beyond family and clan boundaries in an
ethnically mixed society.

Conclusion

What will be the changes after adoption of the revised
co-operative principles? For the first time, the ICA will
give a clear general definition of what a co-operative society
is and thereby define the basic co-operative structure within
which the co-operative principles will be applied.

The definition contained in the ILO Recommendation 127 and
quoted earlier in this paper could be used for this purpose.
Another definition could be the following:

"A co-operative is a group of persons who have united
voluntarily to meet common economic and social needs through a
jointly-owned and democratically-controlled enterprise.

In order to meet these needs most effectively, co-operatives
join together in federations, joint undertakings and other
alliances at local, regional, national and international
levels.

Co-operatives are based on values of self-help, mutual
responsibility and equity. They stand for honesty and
transparency."

Such a definition together with the revised (complete and
correct) list of co-operative principles will have the
following effects:

-    Co-operatives will show a stronger profile.

-    Essential differences between co-operatives and other
     forms of organization will be stressed rather than
     hidden. Attention will be equally given to the
     co-operative enterprise and to the members and the
     co-operative group. The members' role will come into
     focus.

-    Co-operatives will develop their own strategies and
     management tools,  appropriate to their goals and to
     their structure as an organization of persons operating a
     joint enterprise. E.g., in co-operatives strategy will
     have to follow structure, e.g., preserving one essential
     characteristic of co-operatives, namely to be locally
     rooted, to have close links to members and lower
     transaction costs than their commercial competitors.

-    Co-operatives will reassume their role as innovative
     organizations, which members form or join to solve their
     problems caused by rapid social, economic, political and
     technological change21. Being organized in a worldwide
     movement, co-operatives are well suited to contribute
     effectively to solving global problems.

These new orientations will have far-reaching repercussions:

A clear definition will exclude non-co-operative organizations
from the co-operative movement and from membership of the ICA.

-    Emphasis on the self-help character of co-operatives and
     their autonomy will exclude State-controlled
     organizations and semi-public structures.

-    Emphasis on member-orientation will exclude general
     interest enterprises.

After decades of levelling the profile of co-operatives by
assimilating their rules of operation gradually and
continuously to the company model, co-operatives will have to
concentrate on designing typically co-operative forms of
goal-setting, management, financing, evaluation, audit and
networking to use the advantages of their specific form of
organization, which non-co-operative organizations cannot
imitate, as an edge over their competitors.

Co-operatives will focus on members22 which means that
co-operatives will:

-    invest in human resources and in particular in members
     and in the co-operative group, i.e., in education,
     training, and in building up information and
     communication channels;

-    activate members and mobilize their resources for joint
     action (possibly expelling inactive members)23;

-    make full use of members' potentials;

-    redesign classical organizational structures to offer
     more opportunities for active member participation.

In future, co-operatives will have to turn members' role from
fictitious to real. This means that advantages of membership
must become visible and tangible. Membership must make sense
and must be a privilege rather than a formality. Members must
perceive their role as that of a stakeholder and not of a
simple shareholder, holding nominal shares. Members'
satisfaction must become an essential criterion for measuring
the success of co-operatives.

All this means to come back to the simple fact that there
cannot be co-operatives without co-operators.

These changes will only occur if the co-operative leadership
follows the move:

-    from low to high profile of co-operatives,

-    from management-dominated co-operative enterprises
     imitating company practice to member-dominated
     co-operatives developing their own rules of operation,

-    from co-operatives perceived as ordinary enterprises
     serving customers (members and non-members alike) to
     co-operative societies, being composed of groups of
     persons who operate their jointly-owned enterprises
     according to their own priority, which will usually be:
     serving members mainly or only,

-    from management assuming the role of (largely
     uncontrolled) trustees to management implementing
     policies determined by an active, informed and critical
     membership.

This will make it necessary to reconsider the contents of
leadership and management education and training, covering not
only general management skills but specific methods of
co-operative management and in particular the skill of
managing co-operative groups. Co-operative leaders and
managers need not only economic, but also social competence.

Co-operative education as a principle should be worded
accordingly:

"Co-operatives rely on education and training for their
development. They educate their members so they can play their
roles; their leaders so that they can provide sound direction;
their employees so they can improve their co-operative
knowledge and professional competence, and the general public
so they can better understand the values of co-operatives".

The main challenge of co-operatives in the 21st century will
be to fill the growing value vacuum by offering a consistent
and convincing value system, complete with guidelines
(principles) which can direct people towards finding solutions
for their most pressing problems by helping themselves, by
accepting responsibility for their own future, relying on
their own strength and on the force of combined efforts, on
self-help and group solidarity.

In a world where honesty and clarity appear to be no longer
the normal standards of human behaviour in political and
economic operations, the clear pledge that co-operatives stand
for honesty and transparency will be an important component of
this co-operative value system, provided co-operative leaders
live up to these ideals.
------------
References

1    For instance in the Co-operative Societies Act of
     Maharashta, 1960, s.4;  in the Co-operative Societies Act
     of Singapore, 1979, s. 4 (2).

2    See Book, Sven Ake : Co-operative Values in a Changing
     World, Report to the ICA Congress Tokyo, October 1992,
     published by the ICA, Geneva 1992.

3    Cf. Ringle, Gunther : Genossenschaftskultur - Konzeption
     und strategische Bedeutung, in Verbandsmanagement 2/1994,
     S.6.

4    Cf. Penn Awa Eddy : Co-operative Legislation and
     Citizens' Rights, in : International Labour Office,
     Enterprise and Cooperative Development Department : The
     relationship between the state and cooperatives in
     co-operative legislation, Report of a Colloquium held at
     Geneva, 14-15 December 1993, Geneva 1994, pp. 5 et seq;
     Henry, Hagen : Co-operative Law and Human Rights,
     International Labour Office, op. cit., pp.21 et seq.

5    "...Cooperation at its best aims at something beyond
     promotion of the interests of the individual members who
     compose a cooperative at any time. Its object is rather
     to promote the progress and welfare of humanity". Cf.
     Report of the ICA Commission on Co-operative Principles,
     London 1967, p.10.

6    E.g birth rates per 1000 inhabitants (1990/1991) : Japan
     : 9.9; Germany: 10.0; Philippines : 32.0; Senegal 44.0.
     Death rates per 1000 inhabitants ( 1990/1991): Japan :
     6.7; Germany : 11.1; Philippines : 7.0; Senegal 17.0.
     Life expectance (male/female) : Japan 76/82; Germany :
     72/78; Philippines 63/66, Senegal 47/49. Fertility :
     Germany : 1.4; Philippines : 4.1; Senegal : 6.3. Source :
     Beaujeu-Garnier, J. et al. : Images economiques du monde
     1993-94, SEDES, 38e annee, Paris 1993, pp. 13-19.

7    According to calculations made by the German Federal
     Ministry for Youth, Family Matters, Women and Health, in
     Germany the percentage of persons below the age of 20
     will shrink from 23% in 1984 to 16% in the year 2030,
     while the percentage of persons above the age of 60 will
     increase from 21% to 37% during the same period. Cf. Der
     Bundesminister fur Jugend, Familie, Frauen und
     Gesundheit, 4. Familienbericht, Bonn 1986, pp. 31, 32.

8    Cf. Hauser, Jurg A. : Bevolkerungs - und Umweltprobleme
     der Dritten Welt, Bd. 1., Bern und Stuttgart 1990, p.47.

9    Cf. Wissenschaftlicher Beirat der Bundesregierung Globale
     Umweltveranderungen : Welt im Wandel : Grundstruktur
     globaler Mensch Umwelt Beziehungen, Jahresgutachten 1993,
     Bonn 1993, p.118.

10   In Germany the percentage on single households is
     increasing continuously. In 1986 it reached 31% of all
     households and together with two-person  households
     amounted to 60%. Cf. Familie und soziale Arbeit,
     Familienideal, Familienalltag - neue Aufgaben fur die
     soziale Arbeit, Gesamtbericht uber den 71. Deutschen
     Fursorgetag in Munchen, 29.-31. Oktober 1986, Schriften
     des Vereins fur ffentliche und private Fursorge Nr. 266,
     Frankfurt a.M. 1987, S. 475.

11   Der Spiegel, Nr. 31/1994, 1.8.1994, p. 50.

12   Cf. Hauff, Michael v.: Einleitung, in : Hauff, Michael v.
     and Werner, Heinecke (Eds.) : Strukturanpassungspolitik
     der Weltbank, Ludwigsburg, Berlin 1992, pp. 7, 9;
     Chahoud, Tatjana : Verscharfen
     Strukturanpassungsprogramme das Massenelend und die
     "kologische Degradiering in der Dritten Welt ?, in:
     Hauff, Michael v. and Werner, Heinecke (Eds.) :
     Strukturanpassungspolitik der Weltbank, op. cit., 19.

13   Cf. Wissenschaftlicher Beirat der Bundesregierung Globale
     Umweltveranderungen : Welt im Wandel, op. cit., pp. 48 et
     seq.

14   For details on the pollution of soil see for instance :
     Wissenschaftlicher  Beirat des Bundesregierung Globale
     Umweltveranderunger, Welt im Wandel : Die Gefahrdung der
     Boden, Jahresgutachten 1994, Bremerhaven 1994

15   Cf. Wissenschaftlicher Beirat der Bundesregierung Globale
     Umweltveranderungen : Welt im Wandel, op. cit., pp. 15 et
     seq.

16   Cf. Hauser, op. cit., p. 43.

17   The consumption of firewood per person is 1.1 tons per
     year in Thailand, 1.8 ton per year in Tanzania, cf.
     Hauser, op. cit., p. 124.

18   Rady, Hussein M: Regenerative Energien fur
     Entwicklungslander, Baden-Baden 1987, pp. 24 et seq.

19   See for instance Muenkner, Haus-H.: Neue Felder
     genossenschaftlicher Tatigkeit, in : Grosskopf, Werner
     (Hrsg.) : Genossenschaftlich Fuhlen -Genossenschaftlich
     Handeln, Forschungsstelle fur Genossenschaftswesen an der
     Universitat Hohenheim Bd. 5, Stuttgart-Hohenheim 1989,
     pp. 53 et seq.

20   Cf. Taube, Sabine:  Neue Formen organisierter Selbsthilfe
     alterer Burgen,  Institute for Co-operation in Developing
     Countries, Papers and Reports No. 29, Marburg 1993.

21   Cf. Ropke, Jochen:  Co-operative Entrepreneurship,
     Entrepreneurial Dynamics and their Promotion in Self-help
     Organizations, Marburg Consult for Self-help Promotion,
     Series A-7, Marburg 1992.

----------------
* Dr Muenkner, Professor at the University of Marburg,
Germany, presented this paper at the open symposium on "The
Role of Co-operative  in the 21st Century", organized by the
Japanese Consumers' Co-operative Union, Tokyo, on 1 October
1994.