Rebuilding a Co-op - Co-op Kobe (1996)

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This document has been made available in electronic format
by the International Co-operative Alliance (ICA)
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December, 1996
(Source: Coop Dialogue, Vol.4, No.4, May-Dec.,pp.26-27)


Rebuilding a Co-op - Co-op Kobe
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Great Earthquake and Co-operative Value
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"Great Hanshin Awaji Earthquake" on January 17th, 1995 
has caused an unprecedented calamity which killed more 
than 6,400 citizens, injured 40,000 and damaged more than 
390,000 houses. A greater number of members and staff of 
Co-op Kobe suffered from the disaster and it's head office 
was completely destroyed by fire after its breakdown. The 
earthquake has still forced many evacuees to stay at temporary 
houses.

After the earthquake, Co-op Kobe promptly resumed their 
operations at the survived and temporary facilities and started
to support the inhabitants in the damaged area by offering 
emergency supplies through the local government, which 
brought such a public evaluation as "In the quake-kit area 
exist co-operatives". In the local community where the life 
infrastructure was reduced to rubble, most of the people realized 
a necessity of mutual help and co-operation among them. In 
the damaged areas, co-op societies have organized various 
activities; co-op store operation rooted in the community, joint 
buying operation through Han groups, delivery of emergency 
supplies and co-operative insurance officers' visit, etc. The 
co-operative organization and business operations based on 
humanity have demonstrated an effective co-operative value 
which promoted self-help and co-operation among inhabitants 
in a local community.

Co-op societies in the whole country quickly started their 
support activities to Kobe. According to JCCU's report, 
contributions to Co-op Kobe and medical co-ops in the 
devastated areas from other co-operatives and their members 
amounted to more than 14,000 man-days and 2,150 million 
Japanese Yen. Payment by JCCU's life and fire insurance 
has exceeded 2,000 million Yen, while National Federation 
of Workers and Consumers' Insurance Co-operatives has 
paid 16,700 million Yen. Recognizing the importance of 
voluntary activities, Co-op Kobe has helped to organize 
voluntary groups for reconstruction of the area. More than 
3,700 members have been registered as volunteers for the 
various support activities.

Support activities organized by co-op societies throughout 
the country showed an importance and a value of national 
co-operative solidarity. In return, ties between the members 
and co-ops in a severe situation, and their efforts for their own 
reconstruction and co-operation encouraged the supporters 
to recognize the co-operative values.

Besides, the importance of risk management in co-operatives 
has been seriously recognized by such an experience and many 
co-ops have learned some lessons for an establishment of risk 
management, including a conclusion of emergency support 
supplies agreement between co-op societies and local 
governments.

Sales Stagnation and Deteriorating Financial Situation
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According to the JCCU's Co-operative Statistic Review of 
40 co-ops (except for Co-op Kobe), cumulative sales from 
April to November of 1995 increased by 1.6% compared 
with the previous year. However, a whole year results seem 
to be worse, since the sales in the latter half year have not 
reached the last year's level.

The joint buying sales decreased by 0.1% compared with the 
previous year. The weekly average number of members who 
purchased at joint buying decreased by 1.2%, monthly average 
sales per person by 1.0%, although the number of registered 
members increased by 2.1%.

The store sales increased by 3.2% compared with the previous 
year and whole floor space by 7.0%. Fresh food sales exceeded 
the total growth rate. The sales of stores with less than 1,000 
sq.m. decreased, on the other hand that of supermarkets, etc. 
with more than 1,000 sq.m. dramatically increased.

According to the Profit & Loss statement in November of 1995,
the net profit declined by 25% to 0.34%. A personnel expense 
for joint buying rose by 4.7% and for stores by 5.2% from the 
previous year, thus considerably exceeding the growth of sales 
and earnings.

Participatory Member Activities
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The total membership exceeded 18 million at the end of March, 
1995. In October it has increased by 5.3% from the previous
year. The share capital have continued to rise by 8.3%.

Many co-ops have promoted the members' activities centred 
on commodities, for instance, monitoring of co-op brand goods 
by 5,000 members to make use of the members' voice for 
product development and `dietary habits campaign', etc. They 
are taking a step for an innovation where members' participation 
and views are reflected on their products and operations.

While making efforts to improve and enlarge Han group activities, 
many co-ops are trying to spread the members' activities based 
on their initiatives and creativity as such as "joyful activities 
any one can participate in or `members' voluntary group activities". 
So called, `theme activities' were organized by the members 
dealing with their own interests beyond Han groups or 
communities.

There is an example of a co-op which registered about 13,000 
themes 50% up from the previous year where more than 76,000 
members took part in the activities. It shows that members 
positively participate in an arena, where members' initiatives 
and interests can be met. In addition, it is necessary to take a 
process to obtain members' participation to and consensus on 
policy making, between co-operatives and members.

Development of Social Activities
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In a revision of the Food Sanitation Law in a context of 
international harmonization of food safety and hygiene 
standards based on WTO agreements, co-ops have developed 
administration for food safety on a standpoint of consumers. 
Members' study meetings were held by co-ops in 34 prefectures, 
while JCCU organized a national symposium for food safety 
and published some pamphlets concerning these matters. Further 
more, JCCU has promoted the ICA to take part in CODEX 
Arientarius Commission as an observer and sent specialists 
at the concerned meetings.

As a result of our long standing campaign, the Product Liability 
Act has been enforced in July.  JCCU and consumer 
organizations have established `Citizens network for an 
enactment of the Freedom of Information Act' to secure PL 
Act to protect consumer's rights.

In 1994, 4 co-operative societies introduced an environment 
management and audit system. To promote recycling campaign, 
many co-ops have collected milk cartons, plastic trays, bottles 
and cans, PET bottles, batteries, etc., at co-op stores or joint 
buying depots as collecting points. In most co-op stores, members 
are requested to bring their own bags instead of receiving plastic
bags. According to a research into 69 co-op societies by
 JCCU, the among of milk cartons collected has reached 
6,550 tonnes, representing 35% of the total amount in Japan. 
Many co-operatives have held seminars on the Containers 
and Pack Recycling Act, inviting local government officers 
to take part in a planning process of garbage management.

As for social welfare activities, 40 co-op societies have 
organized members' mutual help for housework support by 
the end of March, 1995. 18,000 members were registered as 
supporters and 950,000 hours were put in the welfare services. 
30 co-op societies have held `Luncheon Meeting' and 130 
groups have volunteered lunch delivery service for aged people. 
7 co-op societies have established `welfare information center'
to give information on public and private welfare services 
or volunteer activities. JCCU have prepared to develop a nursing 
equipment business through catalogues nationwide.

In 1995, a turning point of 50th year after the end of World War 
II, 3,200  members joined events in Hiroshima and Nagasaki 
while 60,000 members joined peace march against nuclear 
arsenals in August. In the ICA Congress in Manchester, `Peace 
Resolution' proposed by Mr. Takemoto, President of JCCU, 
sent a delegation to International Court of Justice in Hague to 
hand in a sheaf of 3 million signatures for `Statement of Public 
Conscience' asserting illegality of nuclear weapons and demanded 
the French Government to quit nuclear tests. 

JCCU also organized Peace Trips to Asia considering a Japan's 
responsibility for war crime. 

Improvement of Regional and National Solidarity
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Tohoku Sun Net consisted of three citizens co-ops in the north-east 
region was authorized as the 9th regional federation in Japan.
Furthermore, Co-op Kobe started K-Net with other regional 
co-ops in the western part of Japan. Their aggregate retail sales 
exceeded 700 billion yen.

These regional federations and K-Net represent a large 
proportion of total membership (65%) and total turnover 
(67%), creating the solid foundation for further consolidation 
of the Japanese movement.

COMO Japan, Co-operative store Modernizing Organization, 
collaborated with JCCU to develop 18 items as the low price 
co-op brand goods in 1995. Sales of each item reached 
approximately 500 million yearly.

(This article has been prepared by Japanese Consumers 
Co-operative Union - JCCU)