Basis for an Effective Social Partnership

   This document has been made available in electronic format
           by the International Co-operative Alliance.
                                  Background Information Note 1




A total of 740 million women and men are currently members of
co-operative business enterprises associated through national
federations and unions which are members of the International
Co-operative Alliance (ICA).  It is estimated that the total
number of co-operators is 800 million persons world-wide, with
a further 100 million persons employed by co-operatives.
Moreover, because the co-operative enterprise has economic
significance not only for members and employees, but also for
their immediate families, the total of persons whose livelihoods
are to a significant extent made secure by co-operative
enterprise approaches three billion people, half of the world's

In many countries membership in all co-operatives is equivalent
to a high proportion of the adult population. In 1994 if members
of the International Co-operative Alliance alone are included,
this ratio was between 70 and 79 per cent in Austria, Canada,
Cyprus, Finland, Israel and Uruguay. It was 61 per cent in
France, between 50 and 59 per cent in Belgium and Norway, and
between 40 and 49 per cent in Denmark, India, Japan, Malaysia,
Portugal, Sri Lanka and the United States of America.

Economically, the co-operative movement is also significant. For
example, in 1993 co-operatives in Sweden had an aggregate annual
turnover of 20 billion ECU or 8 per cent of GNP. In other
developed market economies co-operative shares of GNP are likely
to be higher. In the Basque region of Spain in 1989,
co-operatives accounted for 15 per cent of the regional GNP. In
many developing countries which are exporting agricultural
commodities, the co-operative share of GNP falls within 10 to 20
per cent: in Cote d'Ivoire, for example, it is estimated at 15
per cent.

Co-operative business enterprises operate in almost every area
of economic activity and in almost all countries are of major
significance in at least some area. For example, in 1993 in the
European Union, Austria, Finland and Sweden 14 million
agricultural enterprises were member-owners of co-operatives
which supplied 55 per cent of their inputs and marketed 60 per
cent of outputs. In Japan marketing co-operatives handled 95 per
cent of rice and 90 per cent of fisheries output. In India, the
Anand co-operative movement of 57,000 dairy co-operatives with
its 6 million members was the largest national dairy supplier. 
Forty-three per cent of agricultural credit in India was provided
by savings and credit co-operatives and co-operative banks, and
65 per cent of processed sugar was of co-operative origin. In
Brazil one third of doctors are members of the largest health
co-operative in Latin America. In 1991 retail co-operatives
accounted for over half of retail food sales in Switzerland and
34 per cent in Denmark; in 1992, co-operative banks accounted for
17 per cent of the savings market; in 1993, co-operative
insurance enterprises accounted for 20 per cent of the market. 
At the end of 1992, members of savings and credit co-operatives
("credit unions") made up between 35 and 45 per cent of the adult
population in Australia, Canada, Ireland and the United States.


Since 1950 the General Assembly of the United Nations, the
highest intergovernmental policy-making mechanism, has adopted
12 resolutions recognizing the relevance of co-operatives to
achievement of the goals of the UN, supporting their development,
and calling for partnership with the international co-operative
movement. Between 1951 and 1992 the Economic and Social Council
adopted a further 13 resolutions and took 4 decisions with the
same purpose.

The Secretary-General of the UN also transmitted a series of
reports to the Assembly and Council monitoring the contribution
of co-operatives to the goals of the United Nations. In his
latest report, transmitted to the Assembly at its forty-ninth
session (document A/49/213 of 1 July 1994) he 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".

The Assembly acknowledged the timeliness of this conclusion, and
in its latest resolution, number 49/155 of 23 December 1994,
recognized the "important contribution and potential of all forms
of co-operatives to the preparations and follow-up of the World
Summit" and invited it "in formulating ... strategies and
actions, to give due consideration to the role and contribution
of co-operatives."

The Preparatory Committee for the World Summit responded to this
invitation in its final drafts of the Declaration and Programme
of Action. In its Declaration the Summit commits itself "to
increase significantly and/or utilize more efficiently the
resources allocated to social development". It proposes to
"utilize and develop fully the potential and contribution of
co-operatives for the attainment of social development goals, in
particular the eradication of poverty, the generation of full and
productive employment and the enhancement of social integration".
The Programme of Action includes 5 specific proposals on the role
of co-operatives and 4 proposals on their participation in the
implementation and follow-up of the Summit.


In addition to specific references to co-operatives in the draft
Declaration and Programme of Action, there are numerous
references to values and principles which correspond precisely
to those long adopted by the international co-operative movement.
It is  this - combined with the very broad dimensions of the
co-operative movement - which suggests strongly that it must
continue as an essential partner of the United Nations and other
major actors in the follow-up to the World Summit.

The draft Declaration emphasizes a "people-centred sustainable
development": this already exists in the co-operative movement,
an entirely people-centred segment of the market economy.  It
comprises millions of business enterprises - autonomous
mutual-help associations of persons united voluntarily to meet
common economic and social needs - that are jointly owned and
democratically controlled by their members, who make up either
their labour-force or their users, clients or customers.

Member-control of business enterprise, a fundamental
characteristic of co-operatives, constitutes economic empowerment
- itself the basis for political and social empowerment. Both
draft Declaration and Programme of Action emphasize empowerment
as a means to maximize capacities, resources and opportunities
so that all may become genuine partners in sustainable

Empowerment achieved through co-operative enterprise is not
exploitive of others: this characteristic results from the values
held in common by all co-operators: self-help, mutual
responsibility, equality, equity, honesty, openness and social
responsibility. The draft Programme of Action stresses precisely
the same set of values, stating that they promote an environment
in which human beings are at the centre of concerns for
sustainable development. The regular practice of such values by
an international movement with a membership of 800 million
persons, empowered by a substantial economic base, is a matter
of the greatest relevance to the World Summit and its follow-up.

While focusing on member needs co-operative enterprises are
concerned about the communities having the sense of
responsibility to the community in which they operate and strive
for their sustainable development.  Hence, they are vehicles for
achievement of subsidiarity and sustainability at the community
level. This is so because members, living in the community where
their co-operative operates, are mindful that its broad impact
upon that community must be positive in both the short- and
longer-term, and must not negate the advantages they expect to
gain individually.  Furthermore, because they own their
co-operative, and can decide its business policies and monitor
its practices, they can ensure that the positive impact they
desire is actually achieved.  This characteristic, not shared by
other types of enterprise with which an individual can be
associated as worker, supplier or customer, is highly relevant
to the follow-up to the World Summit.

Thus co-operatives are both economic and social in character:
they are business enterprises with a deep sense of social and
environmental responsibility. They are testimony of the truth of
the deep conviction expressed in the draft Declaration that
social and economic development are mutually reinforcing.


The term "co-operative" has been applied in the past to
enterprises imposed by the state upon groups of citizens, and
controlled as an integral part of the public sector. Often their
impact upon "members" and their communities has been injurious.
They were in no way autonomous associations of persons united
voluntarily through jointly-owned and democratically-controlled
enterprises. Because they had no stake in their success,
"members" were not motivated to efficient participation.  Such
"co-operative" systems had nothing in common with the true
purpose and character of the international co-operative movement. 
In most countries where they existed they have been dismantled
and replaced in part by genuine co-operatives.  However, they
have caused some misunderstanding of the nature and achievements
of co-operative enterprise, and their experience should be
discounted in considering the relevance of the co-operative
movement to the issues before the World Summit. 

This Note has been prepared for the information of participants
at the World Summit jointly by the International Co-operative 
Alliance and the United Nations Department for Policy Co-
ordination and Sustainable Development. For further information
contact the  Alliance at 15, Route des Morillons, 1218 Grand
Saconnex, Geneva, Switzerland. Tel: +41 22 929 8888, Fax: 798
4122, E-mail: