CO-OPERATIVES%20POLICY%20AND%20BILL

1
CO-OPERATIVES POLICY AND BILL
Mr Lionel October Deputy Director-General Enterpr
ise and Industry Development 13 October 2004
2
TABLE OF CONTENTS

• Problem statement
• The Co-operatives Policy
• The Co-operatives Bill
• Policy instruments to support objectives
• Some of the key deliverables in progress

3
PROBLEM STATEMENT

• Co-operative development and promotion has for a
  long time focused in the agricultural sector
• Development progressed rapidly due to the 1981
  Co-operatives Act support and government
  subsidies
• The support enjoyed resulted in the development
  of a large commercial agricultural co-operative
  sector

4
PROBLEM STATEMENT

• Co-existence of a dual co-operative sector with
  highly developed white-owned co-operatives and
  weak black-owned co-operatives
• The 1981 Co-operatives Act still caters for
  registration of Agricultural co-operatives
• Agricultural sector still provided with formal
  support and other incentives
• Emerging, majority blacks lacks formal support,
  operate outside of the Act

5
PROBLEM STATEMENT

• Review 1981 Co-operatives Act due to a need to
• Provide an enabling environment for all
  co-operative enterprises in all sectors of the
  economy to flourish
• Diversify growth of all enterprise types to
  contribute to economic growth
• Provide simpler registration processes
• Ensure accessibility to the grassroots through
  decentralization of registration

6
PROBLEM STATEMENT

• Co-operatives as effective vehicles for
  broad-based empowerment
• Emerging black cooperative enterprises compete
  successfully on a national and global scale

7
THE NEW CO-OPERATIVES POLICY

• New policy outlines governments broad guideline
  to develop and support co-operatives
• Outlines the governments approach to defining
  the co-operative enterprises as well as the
  policy instruments that will be utilized to
  achieve the objectives
• Policy statement deals with an important variant
  of economic enterprise, namely co-operatives

8
THE NEW CO-OPERATIVES POLICY

• Promotes the development of economic enterprises
  and diversifies the ownership, size and
  geographic location of those enterprises
• A self-sustaining co-operative movement that can
  play a major role in the economic, social and
  cultural development of South Africa
• Policy statement should be read in conjunction
  with those on Small, Medium and Micro-enterprises
  and the Strategy on Broad Based Black Economic
  Empowerment

9
CONSULTATIVE PROCESS

• Policy document resulted through an intense
  consultation process, initiated in 1997 with the
  establishment of a Co-operative Policy Task Team
• The Policy Task Team consisted of the main
  stakeholders in South Africas co-operative
  movement at the time
• Nine regional workshops and one national
  co-operative conference was organized to discuss
  main policy issues

10
CONSULTATIVE PROCESS

• Cabinet recommended to move the function to the
  dti
• A National Co-operatives Workshop was held last
  year March for input from all stakeholders
• Consultation continued at NEDLAC to discuss both
  policy and Bill
• Report will be adopted by Co-operatives Task Team
  and taken through other relevant structures

11
Policy Objectives and Purpose

• Create an enabling environment for co-operative
  enterprises which reduces the disparities between
  urban and rural businesses, and is conducive to
  entrepreneurship
• Encourage persons and groups who subscribe to
  values of self-reliance and self-help to
  formalise
• Enable such co-operative enterprises to register
  and acquire a legal status/legal persona
  separate from their members
• Promote greater participation by black persons,
  especially those in rural areas, women, persons
  with disability and youth in the formation and
  management of co-operatives
• Establish a legislative framework that will
  preserve the co-operative as a distinct legal
  entity

12
DEFINITIONS, VALUES AND CORE PRINCIPLES OF
CO-OPERATION

• Policy provides definitions of
• Primary
• Secondary
• Tertiary
• For purposes of registration their functions are
  different
• A (primary) co-operative is an autonomous
  association of persons united voluntarily to meet
  their common economic, social and cultural needs
  and aspirations through a jointly owned and
  democratically controlled enterprise

13
OTHER KINDS OF CO-OPERATIVES

• Other kinds and types of co-operatives include
• housing co-operative
• workers co-operative
• social co-operative
• agricultural co-operative
• financial services co-operative
• consumer co-operative
•  marketing and supply co-operative
• transport co-operatives/ services

14
Two characteristics distinguish co-operatives
from other types of enterprises   they are
associations of people who agree to be the
owners, the makers of democratic decisions and
users of their joint enterprise their main
purpose as an economic unit is to promote their
members by rendering services, rather than to
maximize profits
CHARACTERISTICS
15
SCOPE OF POLICY FOR SUPPORT PURPOSES

• Applies to established co-operatives but the
  emphasis is on supporting emerging co-operative
  enterprises
• Emerging co-operatives
• These co-operatives have been identified as
  struggling for survival and lacking training,
  skills, markets.
• Established co-operatives
• These are co-operatives that are mainly
  operating in agriculture and controlled by the
  white minority, although they do exist even in
  other sectors.

16
THE CO-OPERATIVES BILL

• Core principles of co-operation
• Voluntary and open membership
• Democratic member control
• Member economic participation
• Autonomy and independence
• Education, training and information
• Co-operation among co-operatives
• Concern for community

17
POLICY INSTRUMENTS TO SUPPORT CO-OPERATIVE
ENTERPRISES

• Legislation
• Establishing a Co-operatives Development Fund for
  technical assistance and capacity building.
• Special incentives and support measures for
  Co-operatives enterprises (the dti)
• NEF designed a special product for co-operatives

18
POLICY INSTRUMENTS TO SUPPORT CO-OPERATIVE
ENTERPRISES

• Alignment by all COTTI programmes and other dti
  programmes to support co-operatives
• New Small Enterprise Development Agency
• APEX FUND
• Partnerships

19
POLICY INSTRUMENTS TO SUPPORT CO-OPERATIVE
ENTERPRISES

• Availing access to infrastructure through
  incubation programmes
• Acess to SMME tax incentives as businesses
• Preferential procurement
• Institutional support and the Co-operative
  Advisory Board

20
FUNCTIONS OF THE CO-OPERATIVES ADVISORY BOARD

• The functions of the Advisory Board are to
  advise the Minister generally, and to make
  recommendations, with regard to
•  
• (a)           co-operative development policy in
  the Republic
•  
• (b)         the application of any of the
  provisions of this Act or any other law on
  matters affecting co-operatives
•  
• (c)           the publication of any regulations
  in terms of this Act that may be necessary or
  desirable
•  
• (d)      the provision of support programmes
  targeting co-operatives that create employment,
  benefit disadvantaged groups or lead to greater
  participation in the economy by women and black
  people
•  

21
FUNCTIONS OF THE CO-OPERATIVES ADVISORY BOARD

• (e)         the establishment of guidelines for
  co-operative audits
• (f)     any matter referred to the Advisory Board
  that relates to promoting the development of
  co-operatives and
•  
• (g)       any decision the Minister is required
  to take in terms of this Act, on the request of
  the Minister.

22
THE CO-OPERATIVES BILL 2004

• To provide for the formation and registration of
  co-operatives, the establishment of a
  Co-operatives Advisory Board, the winding up of
  co-operatives and to provide for matters
  connected therewith
• The dti as the central department
• Registrar to move to CIPRO
• Establishment of a Unit in the dti/role of the
  dti
• Accommodate other co-operatives kinds and type
  provisions
• Onerous sections removed

23
SOME KEY DELIVERABLES IN PROGRESS

• Strategy consultations nationally and
  provincially finalised and incorporated into the
  draft strategy
• Study tours to Italy, Kenya, Japan and Spain
  being finalised to incorporate best-practice into
  the strategy
• Strategy to be tabled at EXBO early November 2004
• National Co-operatives Conference to be held on
  12 and 13 November 2004

24

THANK YOU