INTERNATIONAL lABOUR OFFICE REPORT ASIAN

ASTUC/19 70/H0 1
INTERNATIONAL lABOUR OFFICE
REPORT
ASIAN REGIONAL SEMINAR
ON
TiRADE UNIONS AND CO-OPEPLA.TIVES
SINGAPORE
20-31 October 1970
110
Geneva
1972
11I\I\k11t\ fl\\ItI\1t\lIIU\III\
44098
Table of Contents
Page
Introduction
1
Preparation of the Seminar
1
Participants
1
Lecturers and Staff
2
Formal Opening
2
Programme and Working Procedure
2
Conclusions
2
APPENDIX I
- List of Participants
- Lecturers and Staff
APPENDIX II
APPENDIX III - Programme
APPENDIX IV
APPENDIX V
APPENDIX VI
- Selected Lectures
7
11
12
15
- Some Examples of Achievements in the Trade Union Co-operative Field in Developing Countries
15
- Housing Co-operatives
32
- Consumerst and Production Co-operatives in
Developing Countries with special reference to
Joint Trade Union-Co-operative Action
55
- Aims and Principles of Co-operatives and the
Applications in Different Asian Countries
66
- Denmark - a Case Study
83
- Common Interests and Relations Between Trade Unions
and Co-operatives and the Role of Government Introducing Singapore as a Case Study
95
- Group Reports
102
- Group A
102
- Group B
105
- Group C
106
- Group ]J
108
- Joint Committee on Workerst Productive Co-operatives
- Selected Country Statements
110
111
- Fiji
111
- Indonesia
118
- Japan
124
- Malaysia
133
- Papua and New Guinea
144
- Singapore
154
- Philippines
APPENDIX VII - Final Recommendations by the Plenary Session
165
172
ASIAN REGIONAIJ SEMINAR ON TRA.DE UNIONS
AND CO-OPERATIVES - SINGAPORE
(20-31 October
1970)
Introduction
It has been generally recognised that co-operatives and trade unions as
organisations grouping the populace should play an important role in the
economic and social upliftment of the masses and hence the country.
This is of
even greater importance in developing countries where these organisations individually do play a part but which part could become more effective if there could
be a conscious pooling of efforts.
Trade unions have undoubtedly helped and are helping to improve the
However, this purely
earnings of the workers through their bargaining powers.
monetary gain will not necessarily improve the workers! economic and social
conditions unless it increases their effective purchasing power and they can be
Co-operative developtaught the wise use of their additional financial gains.
ment, on the other hand, could profit from the discipline and cohesiveness of the
The role of these two organisations are complementary
trade union structure.
rather than separate.
In 1967, the ILO, in collaboration with the Danish Board of Technical
Co-operation, organised the first Inter-Regional Technical Meeting in Denmark to
highlight the complementary role of these two organisations and to examine their
relationship and possible measures to promote greater co-operation between the
This meeting concluded "that the main follow-up efforts will be those of
two.
However, there could be further seminars on
the national bodies concerned ..".
The
a regional basis to examine the several issues in their proper environment.
The
first such regional seminar was held in Nairobi, Kenya, in August 1969.
second, which is that to which this report relates, was held in Singapore in
October 1970.
This report is only intended to give a summary of the organisations and
conduct of the meeting, as, in general, it was found that the broad problems
For
were not specially dissimilar to those brought out at the earfler meetings.
the same reason there were only a very limited number of the lectures which, in
In this connection it will be appreciated
fact, were introductory by nature.
that, because experts with different views were invited to lecture at the meeting, the sponsoring bodies take responsibility neither for the content of their
lectures nor for the views expressed therein.
A very special acknowledgement is made to the Government of Singapore
which was host to the seminar.
Prejaration of the Seminar
The seminar was organised by the ILO in collaboration with the Danish
International Development Agency and the Government of Singapore which made all
local arrangements and provided the very necessary local facilities and services.
Financing of the seminar, with the exception of the costs incurred by
the Government of Singapore, was done under the United Nations Development
Programme.
Participants
Candidates were nominated by their respective governments on the basis
of their national functions and responsibilities in trade unions and co-operative
development and particularly where this touches on collaboration between the two
organisations. Final selection of participants was made by 110 in accordance
with the standing rules and practice.
-2The 31 participants attending the seminar represented 12 countries.
Sixteen were from the trade union movement, 7 from the co-operative movement,
4 from government co-operative departments, 1 from the government labour department and 3 from co-operative educational institutions.
A list of participants
is shown as Appendix I.
Lecturers and Staff
Mr. Henrik Heie, of Denmark, who was co-director of a similar seminar
held in Africa in. 1969, was Director of the present seminar.
He was assisted
by two ILO co-directors - Mr. Jean-Jacques Favre of the Workers' Education Branch
and Mr. Ken Gordon of the Co-operative, Rural and Related Institutions Branch.
The complete list of the lecturers and staff is shown as Appendix II.
Formal Opening
The formal opening of the seminar was attended by the Minister of State
for Labour, who was the main guest speaker, Mr. Devan Hair (Secretary-General of
the National Trade Union Congress of Singapore), representatives of diplomatic
missions and other representatives of the Government and the labour and cooperative movements of Singapore.
Programme and. Working Procedure
The programme of the seminar is shown as Appendix III.
The working
procedure adopted was to use lecturers merely as resource persons introducing the
subjects being dealt with by the meeting and to have the participants discuss
these in smaller groups.
A selected number of lectures is attached as
Appendix IV.
In some cases only extracts from or outline of the actual lecture
is shown.
In the first week the groups were divided largely on a national
basis thereby bringing trade unionists and co-operators together to discuss the
problems common to their separate organisations and also in this way to emphasise
the necessity for closer collaboration.
In the second week the groups were
divided strictly on the basis of trade unionists and co-operators.
Each group
was directed to consider itself the national executive or board of its respective
organisation and the points being discussed were to be considered as being submitted to them by their delegates.
The boards were therefore requested to
appoint subgroups or subcommittees which would meet with their opposites (that
is, with the trade unionists or co-operators, as the case might be) to discuss
specialised subjects.
These subcommittees would then report back, as it were,
to their national executive or boards which would then take whatever action
necessary in arriving at a final decision on the attitude of the organisations
in collaborating with the other.
On the final day, the plenary took the form of
a joint meeting of the national executive (both the trade unionists and the cooperators) to discuss the areas in which they would collaborate and to decide on
precise action to be taken in this direction.
This grouping for the second week
elecited a great deal of interest and proved rather successful generally.
The
reports of the groups are attached as Appendix V to this report.
Participants were requested, prior to the meeting, to prepare country
statements setting out the actual position obtaining in their respective country.
These country statements were duplicated and. distributed before the presentation
and therefore participants were only required to make short introductory statements giving any further explanation or highlighting any point of particular
interest.
The statements were then put before the plenary for general discussion.
Unfortunately, there was not a great deal of discussion resulting from
the presentation of these country statements.
A selected number of these
country statements is attached as Appendix VI.
The programme also included visits to co-operatives and on-the-spot
discussions of the operations of these co-operatives, some of which were trade
union-sponsored.
Conclusions
l. The topics for discussion were so selected as to allow the seminar to
pay special attention to the actual and potential areas of collaboration between
3
the two movements as well as to the possible areas of conflict that may arise in
The major points emerging from the discussions and
such a working relationship.
the exchange of views between the participants were the following:
(a)
Relations Between the Trade Union
and Co-operative Movements
The country statements disclosed that in many of the countries represented there is a cordial but rather passive relationship between the two moveIn other cases, however, the relations were closer and some positive
ments.
collaboration exists.
However, it was unanimously agreed by all participants that the common
objectives of the two movements (i.e. raising the standard of living of the wage
earners and other lower income groups and creating a broad movement towards
economic democracy) could better be met through common efforts supported by the
In one of the group reports from the
collective strength of the two movements.
first week, this was expressed as follows:
"The basic objectives of the trade union as well as of the cooperative movement are protection of the interests of the common man with
limited means against exploitation by intermediaries and privileged classes,
and advancement of their economic and social interests inculcating in them
a spirit of camaraderie, self-help and voluntary action for advancing their
The trade union, as well as the co-operative
common economic interests.
movements, both serve as the training grounds for the development of
initiative, responsibility and democratic operations."
This idea was also brought out in the reports of the other groups.
(b)
Obstacles to the Collaboration
Between the Two Movements
l. The groups observed that there were definite obstacles or barriers to
Some of these
collaboration between the trade union and co-operative movements.
obstacles result from existing legislations and governmental structures and
Others are more related to circumstances which more or less are
practices.
depamdent on the movements themselves.
As to the legislative obstacles it was mentioned that each movement is
governed by a separate law which in most cases makes it difficult to em1ark on an
Each movement is also supervised by a different governeffective collaboration.
As a third point
ment agency which makes it difficult to effect collaboration.
it was mentioned that collaboration is definitely being hampered by the legislative restrictions that are placed on trade unions especially with regard to the
expenditure of union funds, which limits any financial assistance they could
The same is also true in the reverse.
render to cc-operatives.
There are also those obstacles directly connected with the movements
themselves:
4
the fragmented organisations: in many countries there being more than one
central organisation either for co-operatives or for trade unions or both.
When there are several national organisations in each movement, it is particularly difficult to have effective collaboration;
another obstacle is the lack of capital in the co-operative movement and
In cases where trade unions have
very often also in the trade unions.
accumulated substantial savings, this is - by legislation or by practice used only for direct trade union activities;
the generally low level of education, resulting in a shortage of trained
personnel, was also mentioned as a serious obstacle;
it was clearly shown that a primary obstacle to the progress of both the
co-operative and trade union movement and therefore also collaboration
between the two, is not illiteracy in the true sense but a lack of knowledge on the part of members and potential members of the aims and
objectives of the trade unions, on the one hand, and the co-operatives, on
the other.
In such a situation very little could be achieved and both
movements must suffer if the situation is not changed.
The growth of both
trade unions and co-operatives has been hampered by the shortage of suitable
trained organisers and other personnel who could explain the objects and
functions of trade unions and co-operatives and ensure that there would be
a steady expansion in both fields.
It was felt that this could well be
mainly responsible for the existing cleavage between unions and cooperatives.
Collaboration between the movements would undoubtedly be made
easier by the strengthening of each movement;
(v)
although there are intensive educational and training programmes being
undertaken, the lack of managerial skill still remains a great problem,
partly because of competition from the private sector which because of its
longer establishment, can usually afford to pay better salaries to trained
personnel.
(c)
Remedies and Proposals
Having discussed these problems and obstacles the groups went on to
point out some possible remedies and solutions which could help to overcome these
barriers and promote a closer collaboration between the two movements.
One of the groups expressed its views as follows:
"The group was firmly of the opinion that there was an urgent need
for a better utilisation of existing educational facilities, whether they
be governnen±al or those associated with either movement.
It was considered that countries should take part in tripartite discussions which
would involve the drawing up of development plans for a particular period,
say, five years.
Financial arrangements would be on tripartite lines.
With regard to the labour legislation difficulties being experienced
it was suggested that individual countries should examine existing legislation with regard to restrictions on the financial activities of cooperatives, between co-operatives and trade unions and, furthermore, that
the assistance of the 110 should be sought to recommend member nations
that a review should be carried out on labour legislation in this regard.
It was further recommended that a trade union should be permitted to
become a primary member of a co-operative society and, as such, utilise
its share of the funds for projects which would be to their advantage.
One of the most vital recommendations concerns the provision of satisfactory financial arrangements for, without this most vital need covered,
the extension schemes would amount to nothing.
It was envisaged that a workers' bank be established having tripartite
representation on the Governing Body consisting of representatives of the
Government, trade unions and co-operatives.
The Government would provide
an initial amount of, say, 50 per cent whilst the other bodies anc1 or their
members would also have to contribute.
It would be expected that the
Government would progressively relinquish its share of the initial capital
investment and that the bank would be in the hands of the movements.
Profits would be used for furtherance of the aims of both the movements."
Another group recommended that:
"(1)
restrictive co-operative legislation should be removed for effective
utilisation of funds by the trade unions and co-operatives in multipurpose co-operative ventures;
(2)
there should be the education of members, with regard to trade unions
and co-operatives, on a common training programme;
()
there should be a drive to increase membership in both organisations;
(4)
employers be made to contribute towards the education funds for trade
unions and co-operatives."
5
Cd.)
Possible Fields of Collaboration
The groups put forward suggestions on ways in which collaboration could
23.
be made more effective and the possible fields in which this collaboration could
In this connection one group made fairly detailed proposals
be most fruitful.
which form a part of Appendix V to this report.
(e)
Organisational Structure for the
Purpose of Collaboration
There were lengthy discussions on the means needed for a closer col24.
The groups all pointed in
laboration between trade unions and co-operatives.
the same direction, namely, the need for a standing joint committee to deal with
In one group this proposal was expressed in the
problems of common interest.
following wording:
"In view of this present situation we recommend two approaches:
the creation of a central co-operative council to be composed of representatives from the various trade union and co-operative federaThis council would elect an executive committee which would
tions.
formulate basic policies needed to tackle the obstacles and barriers
This council can be financed from contributions
of collaboration.
One
from the various federations of co-operatives and trade unions.
One of the main
main problem of both movements is finance.
objectives of the council would be to set up a fund organisation whose
capital could be derived from contributions from voluntary organisaThe fund raised here would
tions, whether national or international.
The
then be initially used to finance the co-operative movement.
council would be a voluntary organisation without governmental involveThis council would be the forerunner to a more concrete
ment.
The initial objective of
central organisation for both movements.
this council would be to link the two movements and eventually affect
a collaboration;
the second approach would be from the lower level.
Although collaboration between the two movements is affected by legislation and governmental structure, the trade unions in some countries
In the case of one
have been encouraging the co-operative movement.
country, these organisations initiated or encouraged by the trade
These so-called
unions are not governed by the co-operative law.
welfare societies are substantially co-operative organisations in
In the case of another country, trade unions had initiated
nature.
In both
organisations of co-operatives under the co-operative law.
countries it has been progressing very well.
We recommend that we encourage this move from the lower level because we
feel that the national level movement will take time in view of the
tremendous obstacles they have to face.
In conclusion we believe that these two approaches will eventually lead to
effective collaboration between trade unions and co-operatives."
One group discussed the machinery for decision making with a view to
25.
The
improving the efficiency and removing possible conflicts of interest.
following suggestions were agreed to and presented by the groups:
'1.
How decision-making can be made
more efficient
It was generally agreed that:
Ci)
all ventures had to start from the "grass roots level" with the members
having a democratic say, followed by feasibility studies by both trade
unions and co-operatives which are to seek experienced and. expert
This would follow the following lines - planning, analysis,
advice.
proposals, evaluation and, finally, the final project;
-6elected members make the policies approved by the members but are carried
out by the.General Manager, who would be the Chief Executive, and his
staff;
ventures could be, wherever possible, at national level.
2.
How conflicts of interest
shall be treated
It was agreed that:
government financial assistance may be sought wherever considered necessary in major projects like having co-operative ventures embarked upon by
collaboration between trade unions and co-operatives;
co-operatives and trade unions could collaborate to alleviate conflicts
with the Government regarding social matters, taxation, etc."
The second week's group work brought forward other aspects and
dimensions of the subjects treated after quite heated and close discussion
between the two movements.
A common report from the two supposed "boards" was
fully adopted by all participants in a plenary session to serve as a basis for
the promoting of collaboration and includes suggestions for removing obstacles
as well as some practical steps which should be taken by both movements in each
country.
The full text of the final recommendation is attached as Appendix VII
to this report.
Evaluation
The results of the seminar of this type cannot be measured only by the
reports prepared by the participants and the lectures given.
The most valuable
contribution would be the influence it will have on the thinking and minds of the
participants themselves in encouraging new and creative ideas on the possibilities
of trade unions and co-operatives working closely together in a common effort.
However, this somewhat far-reaching result can only be measured by way of a
follow-up survey after some time has elapsed.
Already there is evidence of
closer collaboration or a consciousness of the need for this working together in
a common cause, which are partly the effects of earlier seminars on the subject.
It is therefore not over-optimistic to look forward to the effect this seminar
will have in improving collaboration between the two organisations in the
countries of the region.
7
APPENDIX I
List of Participants
Ceylon
Mr. R.G.G.0. Gunasekera,
Department of Co-operative,
Development of the Govt.
of Ceylon, P.O. Box 419,
Commissioner of Co-operative Development and Registrar of Co-operative
Societies, Dept. of Co-operative
Development, P.O. Box 419, Oolombo.
Colombo.
Mr. V. N. Navaratnani,
Chavakacheri,
Ceylon.
Vice-President,
Ilankai Tholilar Kalagam,
Dimbula Road, Hatton.
Mr. P. A. Wanasinghe,
Govt. Clerical Service Union,
90 Parsons Road,
Honorary General Secretary,
Govermnent Clerical Service Union,
90 Parsons Road,
Colombo 2.
Colom'oo 2.
China
Miss Chen Hue Yi,
30 Lane 118, Wushing Street,
Taipei, Taiwan.
Clerk, Taiwan Highway Bureau,
1 Hwai Ning Street, Taipei,
Taiwan.
Mr. Hsiung Shaw Jar.,
Lecturer, Dept. of Co-operation,
Chung Heing University,
No. 53, Ho-Kiang Street,
Taipei, Taiwan.
No. 2, 1 Alley, 262 Lane,
Nan Shan Road, Chung-Ho,
Taipei, Taiwan.
Fi 1
Mr. P.Q. Tukunia,
Central Fijian Sec. School,
Box 41, Nausori.
Vice-President,
Fijian Teachers' Association,
Box 3583,
Sambula, Suva, Fiji.
Mr. A.P. Maharaj,
Co-operatives Department,
Suva, Fiji Islands.
Assistant Registrar of Co-operative
Societies, Co-operative Department
of the Govt. of Fiji, Suva, Fiji.
India
Mr. A. Das,
Department of Co-operation,
Ministry of Food, Agriculture,
Community Development and Co-operation,
Govermnent of India,
Krishi Bhavan,
New Delhi.
Joint Secretary to Government
of India, Department of Co-operation,
Ministry of Food, Agriculture, C.D.
and Co-operation,
Krishi Bhavan,
New Delhi.
Mr. D.G. Phatak,
Parel Datta Samaj,
Golanji Hill Road,
Parel, Bombay 12,
Maharashtra, India.
Assistant General Secretary,
Mill M. Sabha, Bombay.
Mr. R.N. Rae,
1/H-6, B.H. Area,
Kadma,
Jamshedpur - 5. Bihar,
India.
Chairman, Director,
Bihar State Wholesale Consumer
Co-operative Federation, Patna.
Director - National Co-op,Consumers'
Federation, New Delhi.
Chairman, Suparibaug Cons.
Co-operative Society Ltd.,
39 Patel Terrace, Parel, Bombay 12.
-8-
Mr. 0.S. Rao,
South Jail Road,
Visakhapatnam 4,
Andhra Pradesh.
General Secretary,
South-Eastern Railwaymen' s Congress.
Lad one sia
Mr. Abbas Adhar,
Dj. Hajam Wuruk No. 86,
Djakarta.
Member of National Executive Board
and Head of Department of Foreign
Relations, Federation of Pantjasila
Workers' Union,
Djl. Menteng Rara No. 60,
Djakarta.
Mr. M. Diponegoro,
66 Suronatan,
Jogjakarta.
Secretary, Jogjakarta Chapter of
Koperasi Tekstil Indonesia,
Koperasi Tekstil Indonesia,
(Indonesian Textile Co-operative),
166-A, Djalan Wahid Hasjim,
Djakarta.
Mr. M. Arief,
h 94/2 Djl. G. Latimodjong,
Makassar,
South Selawesi.
Deputy Chairman, South Selawesi
Consulate of Gasbiindo.
Japan
Mr. M. Kobarashi,
Japanese Consumers' Co-operative
Union (Seikyo-Kaikan),
1-13, 4 Cho-Me, Sendagaya,
Shibuya-ku, Tokyo.
Member of Board of Directors and
Head of General Affairs Department,
Japanese Consumers' Co-operative
Union (Seikyo-Kaikan), 1-13,
Li. Cho-Me, Sendagaya, Shibuya-ku, Tokyo.
Mr. A. Nagamatsu,
97 Hakuraku,
Kanagawa-ku,
Yokohama.
President of Murayama Local,
Federation of Japan Automobile
Workers' Unions, Domei,
1-4-26 Kaigan Minato-ku, Tokyo.
Malaysia
Mr. Aziz Mirza,
No. 2 Jalan Templer,
P.O. Box 72,
Tel:
59791/3 K.L.,
Petaling Jaya,
Selangor.
Chief Industrial Relations Officer,
National Union of Plantation Workers.
Mr. Francis Soosay,
34 Jalan Pipit,
Off Ipoh Road,
Kuala Lumpur,
West Malaysia.
General Secretary,
Malaysian Co-operative Union,
Kuala Lumpur.
Secretary, National Multi-Purpose
Co-operative Society Ltd.
Tel:
52556 K.L.
Pakistan
Mr. M. Sharif,
'-1-06 Qamar House,
M.A. Jinnah Road,
Karachi.
President, Pakistan National
Federation of Trade Unions,
406 Qamar House,
M.A. Jinnah Road,
(Tel:
Karachi.
237377/231741/11-1079)
-9
Mr. Jamil Aslam.,
Co-operative Training Institute,
Kohat Road,
P.O. Small Industries,
Peshawar.
Mr. Md. Korban Au,
36 Purana Polton Lane,
Dcca 2.
Principal,
Co-operative Training Institute,
P.O. Small Industries,
Peshawar City, N.W.F.P.
President and Pounder,
Pakistan Labour Welfare Federation
(Sramik Kallayan Federation),
36 Purana Polton Lane,
Dacca 2.
Tel:
256737.
Mr. Mushfequr Rabman,
Co-operative Directorate,
Government of East Pakistan,
9-D Motijeel Commercial Area,
Dacca 2.
Joint Registrar of Co-operative
Societies (Administration),
Co-operative Directorate,
Government of East Pakistan,
9-D Motijheel Commercial Area,
Dacca 2.
Tel. Office: 250431
Res:
280396
Papua and New Guinea
Mr. G.D. Collins,
Department of Labour,
Konedobu, Port Moresby,
TPNG.
Chief of Division,
Labour Legislation,
Department of Labour,
Konedobu, Port Moresby.
Philippines
Mr. R.M. Oca,
Transport Hall,
PTGWO Building,
Port Area, Manila.
Vice-President, Associated Workerst
Union, Director, Philippine
Transport and General Workers?
Organisation (PTGWO), Transport Hall,
PTGWO Building, Port Area, Manila.
Mr. H.S. Regala,
1845 Taft Avenue,
Manila.
Vice-President, Federation of Free
Workers, 1845 Taft Avenue, Manila.
Mr. J.R. Veloso,
Philamlife,
P.O. Box 1152,
Manila.
Director, Filipino Co-operatives
Wholesale Society md. Room 868,
Isabel Building, Espana Street,
Manila.
Mr. D.C. Punzalan,
Agricultural Credit Co-operatives
Institute (ACCI), College,
Laguna.
Co-operative Education Officer,
Agricultural Credit and Co-operatives
Institute (ACOI), College, Laguna.
Singapore
Mr. I.C. Baptist,
2 Welecoms Quarters,
9 1/2 m.s., Yio Chu Kang Road,
Singapore 28.
Secretary-General, Singapore
Government Technical Services Union,
2 Telecoms Quarters,
9 1/2 m.s., Yio Chu Kang Road,
Singapore 28.
Mr. A. Aziz Zakariah,
23 Rochdale Road,
Singapore 19.
Asst. Hon. Treasurer, Singapore
Govt. Servants Co-operative
Thrift and Loan Society Ltd.,
P.O. Box 1144, Singapore.
- 10 -
Mr. Ngui Kiat Chuan,
54 Kampong Java Road,
Singapore 9.
Management Committee Member,
Singapore Co-operative Thrift
and Loan Society Ltd., (City Council),
171-A, Joo Chiat Road,
Singapore 15.
Viet-Nam
Mr. Nguyen-Due-Dat,
11-C Nguyon Hoang Street,
Cholon,
Viet-Nara.
Pounder of Clerical Workers' Union
(President),
Confederation of Labor (C.V.T.),
14 Le Van Duyet Street, Saigon.
APPENDIX II
Lecturers and Staff
Director
Mr. Henrik HEIE
Kronprinsensgade 13,
DK 1114 Copenhagen K,
Denmark.
Co-Direct o i's
Mr. J.J. FAVRE
Workers' Education Branch,
110,
Geneva.
Mr. K,E. GOEDON
Co-operative, Rural and Related
Institutions Branch,
110,
Geneva.
Administrative Officer
Mr. D.K. KHANNA
110 Regional Office for Asia,
P.O. Box 1759,
Bangkok,
Thailand.
Liaison Officer
Mr. Foo Shiang Hui
Ministr' of Labour,
Singapore.
lecturers
Mr. T. BAVIN
International Federation of Plantation,
Agricultural and Allied Workers,
Geneva.
Mr. J.M. BANA
ICA Regional Office,
New Delhi.
Mr. G.S. DASS
Co-operative Department,
Kuala lmnpur.
Mr. Y. LEVI
Afro-Asian Institute for Co-operatives
and labour Studies,
Tel Aviv.
Group leaders/lecturers
Mr. W. SCHROEDER
Teacher, labour High School,
Esbjerg,
Denmark.
Mr. 3. SVENNINGSEN
Consultant in International Affairs,
1.0. (TuC),
Denmark.
Secretarial Staf
The Ministry of labour made available to the seminar a full complement of
secretarial staff.
- 12 -
APPENDIX III
PROGRAMME
Tuesday, 20 October
9.00 a.m. - 10.15 a.m.
Registratipn. of participants and introduction
to the seminar
OPENING REMARKS:
10.30 a.m.
Mr. K. KESAVAPAI,
Ministry of Labour,
Singapore.
Speakers:
Mr. C.V. DEVAN NAIR,
Secretary-General,
National Trades Union Congress.
Mr. J.J. FAVRE,
International Labour Office.
Mr. H. KEIE,
Director of Seminar.
Opening address:
Mr. Sia Kah RtJI,
Minister of State for Labour,
Singapore.
RECEPTION
2.30 p.m. -
3.15 p.m.
The Role of Co-operatives in Social and Economic
Development in, Developing Countries
Mr. K.E. GORDON,
ILO Co-operative, Rural and Related Institutions
Branch.
3.15 p.m. -
3.30 p.m.
BREAK
3,30 p.m. -
5.00 p.m.
The Role of Trade Unions in Social and Economic
Development in Developing Countries
Mr. J.J. FAVRE,
ILO Workers' Education Branch.
WednesdaX, 21 October
9.00 a.m. - 10.45 a.m.
Aims and Principles of Co-operatives and Their
Practical Application in Different Asian Countries
Mr. J.M. RA.NA,
IOA Regional Office and Education Centre for
S.E. Asia.
10.45 a.n. - 11.00 a.m.
BREAK
11.00 a.m. -
1.00 p.m.
Country Statements
2.00 p.m. -
3.15 p.m.
Common Interests and Relations between Trade Unions
and Co-operatives, and the Role of Government.
Introducing Singapore as a case study
Mr. C.V. DEVAN NAIR,
National Trades Union Congress.
3.15 p.m. -
3.30 p.m.
BREAK
3.30 p.m. -
5.00 p.m.
Country Statements
- 13 -
Thursday, 22 October
9.00 a.m. - 10.45 a.m.
Introducing Denmark as a case study
Mr. H. HEIE,
Federation of Workers' Co-operative, Building and
Contracting Societies,
Denmark.
Mr. W. SCHROEDER,
Labour High School,
Esbjerg, Denmark.
Mr. J. SVENKINGSEN,
L.O. (TUC),
Denmark.
10.L15 a.m. - 11.00 a.xn.
BREAK
11.00 a.m. -
1.00 p.m.
Introduction to group work
2.00 p.m. -
3.15 p.m.
Housing Co-operatives
Mr. G.S. DASS,
Division of Co-operative Development,
Kuala Lumpur.
3.15 p.m. -
3.30 p.m.
BREAK
3.30 p.m. -
4.00 p.m.
Country Statements
4.00 p.m. -
5.00 p.m.
Group Work
Friday, 23 October
9.00 a.m. - 10.45 a.m.
Group Work
10.45 a.m. - 11.00 a.m.
BREAK
11.00 a.m. -
1.00 p.m.
Consumers' Co-operatives
Mr. Y. LEVI,
Afro-Asian Institute for Co-operative and Labour
Studies,
Israel.
2.00 p.m. -
3.15 p.m.
Country Statements
3.15 p.m. -
3.30 p.m.
BREAK
3.30 p.m. -
5.00 p.m.
Group Reports
Saturday, 24 October
8.00 a.m.
Visit to some co-operatives in Singapore
Sunday, 25 October
9.00 a.m. - 1.00 p.m.
Excursion and sight-seeing
Monday, 26 October
9.00 a.m. - 10.45 a.m.
Some Examples of Achievements in the Trade Union/
Co-operative Field in Developing Countries
Mr. T. BAVIN,
International Federation of Plantation,
Agricultural and Allied Workers,
Geneva.
10.45 a.m. - 11.00 a.m.
11.00 a.m. -
1.00 p.m.
BREAK
Savings and Credit Societies - Panel Discussion
2.00 p.m. -
3.15
p.m.
Workers' Productive Co-operatives
Mr. Y. LEVI,
Afro-Asian Institute for Co-operative and Labour
Studies,
Israel.
3.15
p.m. -
3.30
p.m.
BREAK
3.30 p.m. -
5.00 p.m.
Country Statements
5.00 p.m. -
6.30 p.m.
Introducing rearranged Group Work - Boards
Tuesday, 27 October
9.00 a,m. - 10.145 a.m.
Group-Joint Committee
10.45 a.m. - 11.00 a.m.
BREAK
11.00 a.m. -
1.00 p.m.
Grouo-Joint Committee
2.00 p.m. -
3.15 p.m.
Grout Work - Board
3.15 p.m. -
3.30 p.m.
BREAK
3.30 p.m. -
5.00 p.m.
Group Work - Board
Wednesday, 28 October
9.00 a.ni. - 10.45 a.m.
Workers' Education, Panel Discussion
10.1+5 a.m. - 11.00 a.m.
BREAK
11.00 a.ni. -
1.00 p.m.
Plenary Session of Two Boards - Panel of Board
Representatives
2.00 p.m. -
3.15 p.m.
Assistance to the National Movements - Panel
Discussion
3.15 p.m. -
3.30 p.m.
BREAK
3.30 p.m. -
5.00 p.m.
Panel Discussion (contd.)
Thursday, 29 October
Free - Public Holiday
Friday, 30 October
9.00 a.m. - 10.145 a.m.
Presenting Draft Conclusion
10.45 a.m. - 11.00 a.m.
BREAK
11.00 a.m. -
1.00 p.m.
Presenting Draft Conclusion (contd.)
2.00 p.m. -
3.15 p.m.
Closing Session
Saturday, 31 October
Departure
- L5 -
APPENDIX IV
p
Selected Number of Lectures - Some Examples of
Achievements in the Trade Union - Co-operative
Field in Developing Countries
by
T. BAVIN
eneral Secretary, International Federation of
Plantation, Agricultural and Allied Workers
A.
Introduction
Both unions and co-operatives self-help organisations based on mass
1.
membership - primary development coincidental with the developing phase of
industry.
B.
Developed World
Current position - wide retention of various forms of co-operative
servicing by unions not always in association - co-operative movement weakening of former links - certain exceptions.
C,
Developing World
Co-operativism - growing influence of employer-producer sectQr resulting impact in many African countries and parts of Asia, i.e. Kenya, Uganda co-operative activity mainly producer - developed by agricultural employing
interests, i.e. coffee - dairy, etc.
Sugar to-operatives in India - resulting lack of impact by the cooperative movement on impoverished masses.
First impact of trade unions - Western concepts - limitations of
approach - industry still only employs 5-15 per cent labour force - large-scale
underdevelopment - lack infrastructure - massive 'underutilisation land and
labour - trade union frequently catering for a minority.
Resulting problems - slow economic social progress - key commodities
sold external markets - problems arising - production - dependent minority
labour force - danger conflict trade unions/government, exemplified certain
African countries - need retain basic concept both movements - servicing membership - contributing ally government in seeking economic social progress.
The Campesino movement in Latin America - membership predominantly rural agricultural wage earners, subsistence agriculturists, sharecroppers - tenants.
Example a
Venezuela FCV - 700,000 members refounded following termination of
dictatorship in 1958.
Activities - wage-earning sector, large-scale activities non-wage earning - promoted economic and co-operative activities - two
representatives assiied by law to national agrarian institute - responsible land
reform - has representation on Board of Agricultural Bank - the National Committee
for Co-ordination plamaing agrarian reform - in ADGRO concerned agricultural
storage - representatives also participate national meetings on productivity,
marketing, agrarian matters including irrigation soil conservation - land
reclamation.
This echoed regional local levels - active co-ordination with
INA - National Agrarian Development Board - projects community development,
- 16 -
Pederation also
land settlement, co-operative training, extensiofl credit.
processes application land ownership - improvement - rural construction hduse
Also land utilisation interests members schools - electrification, etc.
organisation producer-consumer co-operatives.
Committee for economic formation and direct enterprises - 1964 first
8.
project StJCAM - Agricultural Supplies Incorporated initial capital
bolivares 1,100,000 secured loan - Agricultural Bank bolivares 14,500,000 purpose: purchase of agricultural machinery.
Pirst year, 780 tractors, etc. imported direct - machinery exchanged
9.
in Poland by barter for rice - supplied membership on favourable credit - 90 per
cent which was supplied by Agricultural Bank, 10 per cent Agrarian Institute beneficiaries repay purchase shares SUCAM to value of 25 - saving made - compared
open market.
Industrias Campesinas C.A. - rice processing plant established 10.
production 1,200,000 kilos monthly - agricultural mechanisation supply and
servicing - workshops Valencia.
11.
INCAM - wholesale marketing organisation for POV membership - produce
currently operating - mainly Valencia - Caracas.
12.
Other projects - further rice mill - cotton ginning machine - studies production - animal-feeding concentrate and milk processing.
Based co-operative
principle - complexity of co-operative law compels registration civil law
entities.
Educational activities - six schools strategically sited for rural
13.
agricultural education - further site planned as also "superior choo1 for
rural qualifications".
14.
Wider impact these activities:
abolition of the monopoly of the latifundium system;
land allotment - more than 2,600,000 hectares to 140,000 rural families;
increase in agricultural production - an annual rate of 7 per cent decline in rural population of 100,000.
PANAII - Colombia
Claims a massive membership throughout the Colombian countryside - wage/
15.
Co-operative activities UOOPAN - producer consumer
non-wage-earning members.
Twelve
co-operatives - works closely with National Savings Society - UCONAI.
co-operatives now established Campesino training centre - problems - important
factor rural life.
ANACH - Honduras
16.
Claims membership as Colombia above - Campesino organisation - reestablished IPPAAW assistance - result educational organisational activities now good relationship with National Agrarian Institute - medical co-operative government grant lempiras 30,000 - vehicle - assist co-operative activities credit from National Bank lempiras 150,000 - member contribution co-operative
division lempiras 60,000.
-
17 -
SITRkTEROO - Honduras
Eleven thousand members recognised 1954 - best wages, conditions indebtedness - illiteracy - lack social awareness.
Problems:
banana zone.
co-operative housing - began in the early sixties - loan
Present prograninle:
One hundred and eighty-four houses built: urbanised
800,000 lempiras JSAID.
land negotiated from employer - 6 pe' cenb - low cost achieved using unioi and
co-operative teclmiues combined - resulting impact on occupants - now
negotiated 3 million lempiras employer further investment - 192 further houses
Further 900 houses planned.
to date.
Consumer co-operative activities 1959 - five further stores throughout
rural area - open to non-members - resultant fall in rural prices generally.
Death benefits scheme - currently 3,300 members.
Educational activities - establishment fourteen schools rtn jointly
government and parents' organisation - open to hIcpesinosI children.
Establishment college - best teachers, lower fees - financed by union
co-operative fees - vocational training workshop extension - pupils equipped to
earn way through university.
Literacy programmes - jointly government - union - co-operative - first
year 600 pupils.
Credit union for members - 8,000 members receiving weekly loans - total
first year 1 1/2 lempiras - participation establishment Workers' Bank.
PENCAP - Peru
Co-operative division PENCA000P Established in the early fifties.
effO'ts to set up workers' bank, political problems - military take-over process reorganisation.
PTA - Peru
Sugar workers' federation established. IPPAAW assistance - very
successful consumer co-operative - was in process taking over sugar central as
co-operative - this now nationalised.
PENACLE - Ecuador
Established IPPAAW assistance 1969 - claims 5,000 members - wage/
EC0PAN - field
Co-operative activities - co-operative
non-wage earners.
Government recognition courSes in co-operativism/trade union administration.
difficulties.
ASIA
National Union of Plantation Workers - Malaysia - problems redundancy - Great
Alonioners Trading Company - registration difficulties a co-operative - ran on
co-operative basis - December 1968 - funds totalled M$l,295,388.92 - three
estates purchased - plans to use as basis wider form of co-operative servicing
three hostels - members' children - own newspaper - provided members' children
scholarships - home and overseas.
CeylOn affiliate, Ceylon Workers' Congress (CWC) - basis for land
28.
resettlement co-operative - redundant plantation worker membership - land
already purchased.
- 18 India - I!eelama1i Plantation Workers' Union - 18,000 members - consumer co-operative - Sakhar Kamgar Sabha Shrirampur - membership 4,000 successful consumer co-operative - hospital
run medical co-operative.
Viet-Nam - FTP and national centre, CVT - set up peasants' organisations
late fifties - highly successful - distributing fertilizer - low cost - sabotaged
politicians - activities now resumed - successful fishermen's co-operative self-help housing projects - refugees.
Philippines affiliate Free Farmers' Federation (FFP) assisted and
advised by IFPAAW established fertilizer cc-operative membership in 1966, forty now membership 2,278 (1969), total funds now pesos 169,838.73 - activities rice
mill, irrigation projects, tractor hire.
Associated Labour Union - AFL - VIMOONTU - general membership - Cebu co-operative medical service members - consumer co-operative - last two years successful.
Indonesia - early example Railway Union - co-iperattve activities problems fragmentation - lack personnel - IPPAAW co-operation - HITASI campesino-type organisation - low income group - educational co-operative examples - establishment rotational fund.
Africa
Nigeria - Eastern Nigerian Development Corporation and Allied Workers'
Union - successful consumer co-operative - training centre for wonlen - products
sold co-operative society, terminated aftermath war - recommencement planned.
Nigeria - Western Nigerian Development Corporation and Allied Workers'
Union - consumer co-operative - plans extension.
Beginning, campesino-type
organisation Nigeria Agricultural Development Association (NADA) - potential
membership - shares - co-operative piggery.
Ethiopia - IPPAAW affiliate the EVA Sugar Estates Workers' Union of
Ethiopia, established co-operative fund - successful consumer co-operative transport service.
Kenya - IPPAAW affiliate Kenyan Plantation and Agricultural Workers'
Union - established consumer co-operative.
Seeking through national centre IPPAAW extension activities.
Cameroon - IFPAAW affiliate Cameroon Development Corporation Workers'
Union - lack trained personnel - pre-co-operative formed for food essentials
membership.
Conclusions
Further examples Israel - Tunisia.
Wide variation activities degree success - contact impoverished mass - TU-co-operative servicing - opens
new approach.
Examples - IFPAAW contribution - special courses given in main areas Campesino Conference Venezuela 1967 - Asian Regional Conference 1970 - Ceylon ILO assistance-travel grants training Israeli Afro-Asian Institute - advice assistance - securing "seeding" financial support - negotiations international
level.
Potential importance COPAC consisting representatives ILO-PAO-IPAP-ICAIFPAAW, purpose assist in agrarian co-operative stimulation developing world need terminating existing fragmentation TU-movement - similar weaknesses - cooperative activity - offers new stimulus economic social progress - trade union
government co-operation.
- 19 -
Introduction
In speaking of co-operative-trade union activities in the developing
world, I feel it desirable to first refer briefly to the background of the
relationship between the two movements.
To the Rochdale pioneers the concept of service was similar to that of
the trade union movement, t.e'. the rea1iation that through the strength of
Because of this
organisation, the greatest benefits possible accrue to members.
joint concept and because both were seeking to cater for the underprivileged
masses, relationship between them was then close and both experienced their
primary development coincidental with the earlier phase of the industrial
revolution when they offered the only form of protection open to the lower income
Hence, in their present form, they are largely products of the
groups.
development phase of the industrialised countries.
Over the years however there has been a considerable lessening of this
Thile trade unions generally have retained various
earlier älose association.
forms o± co-operative servicing for membership these, in the USA and certain
other countries, appear to have become increasingly divorced from the national,
Thus, gradually there has
and indeed the international co-operative movement.
been a weakening of the former close links originally existing between the two
Exceptions to this over-all trend are seen in the Federal Republic of
groups.
Germany, where the trade unions have a massive investment in national and international co-operative activities, as also in the Scandinavian countries.
Coincidental with such lessening of association, large sectors of
agricultural employers discovered, and increasingly used, the co-operative
This has had important repercussions,
approach in furthering their interests.
not only in the developed world, but also at international level, in that this
producer sector of the co-operative movement has greatly developed and
increasingly influenced the over-all international approach of the co-operative
The effect of this is seen in a number of developing countries, as
movement.
for instance in Africa, where co-operative activity, which has been well
established in some countries for a number of years, is mainly controlled by
and existing in the interest of employing interests.
What then has been the impact of the trade 'union movement in the
You will remember that much of the trade union
underindustrialised countries?
activity in the developing world was greatly stimulated, not more than some
twenty years ago, by the international approach of the International ConfederaNot
tion of Free Trade Unions and the International Trade Secretariats.
unnaturally, this approach was largely influenced by the experience gaind in
Such an
the highly sophisticated advanced countries of the developed world.
approach however did not, nor has it as yet in my view, taken sufficiently into
account the wide divergency in conditions existing between the developed and
In the developed world, industry has so progressed and
the developing world.
the countervailing forces within society so developed that economic growth has
Here too, the trade union
become increasingly rapid and self-stimulating.
movement is based on a mass membership drawn from the predominantly wage-earning
Hence it operates from a position of considerable strength.
sector.
In the developing world, the position is extremely different.
Industry in most of these countries is still barely keeping pace wjth population
growth, while at present, generally not more than 5-15 per cent of the labour
The major portion of these are frequently
force are in fact wage earners.
At the
engaged in plantations rather than in the purely industrial sector.
same time, there is a general lack of capital, large-scale lack of technical
"imow-how", lack of infrastructural development, together with a massive underutilisation of land and labour with subsistence agriculture eagaging the bulk
of the population.
In such circumstances, and while the trade 'union movement can well
claim remarkable progress in so far as the minority wage-earning group is
concerned, it would appear that unless its approach is widened and geared to
- 20 the situation in which it is operating, there is little possibility of developing
a real mass membership or of making that effective contribution to economic and
social progress which is essential.
In addition, and because of the limitations
in numerical strength, fragmentation, etc., trade unions are frequently in
danger of being used by political groups.
Again the wage-earning sector, which it has successfully enrolled, is
generally engaged in key sectors of industry, prOducing the exports on which the
country's economy is dependent for much needed foreign exchange.
In such
circumstances and in view of the fact that, as in the west, unions have given
major attention to improvements in wages and conditions and, because of the key
nature of the industry in which they operate have been largely successful, this
success, in the view of certain governments, has created embarrassment in the
latter's attempt to compete in the international market for earnings necessary
for essential over-all economic and social development.
The results of this are already apparent in certain countries where
governments - faced with the quasi-impossibility of successful competition with
the highly automated and mechanised industry of the west, lacking funds for
infrastructural development, attempting to develop an economy, still largely
geared to the requirements of the former metropolitau power, see a danger to the
over-all struggle for progress in the attempts of the unions for improvement of
membership conditions.
In such circumstances it is obvious that, unless the trade union and cooperative movements can so reorient their approach as to develop and adopt
methods of servicing seen to contribute to economic progress, there appears
little prospect of improvement in this position.
In fact, regrettably, it
would appear that to date neither the trade union nor the co-operative movement
have contributed as fully as they should to the over-all well-being of the masses
of the developing world, which contribution - in my view - must be their primary
task.
If this is to be changed, the benefits of both the co-operative and
the trade union movement must be brought to the masses.
But if this is to be
done effectively, many changes still appear to be necessary.
In so far as the
trade unions are concerned, these include rapid termination of the fragmentation
which is still the curse ci' the movement in too many areas, a widening of membership to include all workers, wage and non-wage earning and, more germane to this
talk, wider forms of servicing, including full utilisation of the co-operative
approach.
Something on these lines, as I hope to show, is already being done,
and is gaining impetus, although more, much more action in this field is
necessary, particularly with regard to the educational approach at all levels.
As the General Secretary of the International Federation of Plantation,
Agricultural and Allied Workers which has long recognised this need, my Imowledge
on this is primarily gathered from information oi activities carried out by our
affiliates and/or associates throughout the world.
Hence the examples which
follow will be primarily concerned with activities in rural unions in the
developing world.
An interesting example of the wider approach needed is given by the
campesino movements of Latin America which cater for the rural masses, including
agricultural wage earners, subsistence agriculturists, sharecroppers and tenants,
as members.
One of the most successful of such organisations is the IPPAAW affiliate,
the "Federacion Campesina de Venezuela" (Pay), claiming some 700,000 members.
It has had a stormy history since it was first founded.
It is an important
affiliate of the national centre, the "Confederacion de Trabajadores de
Venezuela" and, in addition to much wider activities, has a section dealing
effectively with trade union/employer relationship on behalf of its wage-earning
sector which also benefits from the more general servicing outlined below.
The
Federation includes various political groups in its membership and continues to
work in accord with the Government of the day, irrespective of which political
denomination.
It enjoys the legal right to have representation on all national
- 21 -
bodies concerned with rural development at local, regional and national level,
including the National Agrarian Institute (INA), which is responsible for the
implementation of the land reform rbgramnie, and this representation is of'vital
Other bodies on which the Federation is represented
interest to PCV members.
include the Board of the National Agrarian Bank, the Natioial Committee for Co.ordination and Planning for Agrarian Reform as also the Board of ADGR0, the body
Representaresponsible for storage of agricultural products at national level.
tives on these bodies participate regularly at meetings at all levels on
productivity, marketing and on matters such as irrigation, soil conservation,
In association with the National Agrarian Institute it
land reclamation, etc.
plays a major role in rural community development, land settlement, co-operative
The Federation also
training and in the provision of credit to membership.
processes members' applications for land ownership and improvement, the construction of rural schools, housing and in the electrification of the countryside.
In its own part in contributing to this massive programme, the Federation has
also set upa number of producer and consumer co-operatives throughout the
countryside.
As early as 1964, the need for agricultural 1achinery to be made
available to members on the newly-opened lands following agrarian reform, became
The Committee for Economic Development and Direction of
increasingly urgent.
Enterprises was established, which was one of its first projects set up, the
"Agricultural Supplies Ltd." for the purchase of agricultural machinery and
Its first initial capital raised from membership bolivares 1,100,000
ecjuipment.
(1 bolivar = US0.42) was sufficient to secure credit from the National Agrarian
Bank of Bolivares 14,500,000 for the purpose of purchasing and distributing
agricultural machinery to FCV membership.
So successful was StJCATJI in its first year of operation that 780 units
of agricultural machinery, mainly tractors, were purchased abroad and distributed
to membership on a credit, 90 per cent of which, by agreement, is made available
by the National Agrarian Bank and 10 per cent by the National Agrarian Institute.
Provision for long-term repayment is made, conditional on the borrower taking
shares in StJCAM to the value of' the 25 per cent saving made by purchase through
StJCAM also gets 5 per
this organisation, as compared with the open market.
cent on all sales made and received bolivarOs 430,000 from "this source in its
it i hoped" increasingly to finance PCV activities
first year of operation.
from earnings from these and the further activities listed below as also such
others as may be envisaged.
Subsequently SETCAM was able to arrange the barter of rice produced by
PCV membership for tractors made in Poland.
The setting up of SUCAM was rapidly followed by the creation of the
Industrias Campesinas (INDUCAM) whieh first set up a rice processing plant with
the aid of a loan from the Agricultural Bank and which is capable of a production
of 12 million kilos monthly.
It also established its own agricultural mechanisation service for
campesinos which, in addition to normal servicing in its workshops in Valencia,
assembles newly-imported agricultural machinery prior to distribution to memberThe problems of marketing the products of an ever-growing membership led
ship.
INDUCAM in turn to the setting up jointly with the FCV of two whole sale marketing
centres, one in Valencia and one in Caracas, as also a chain of co-operatives and
pre-co-operativee throughout "the rural areas.
Purther projects contemplated, or already in being, include a second
INDUCAM is also conducting
rice processing mill and cotton ginning plant.
studies into the feasibility of producing and supplying animal-feeding concentrates and into milk processing.
All these activities are based on co-operative principles, although
unfortunately, owing to the present complexity of Venezuelan co-operative law,
they are registered as "civil law entities".
- 22 -
Not surprisingly, in view of the size of membership, the area cpvered
and. the low educational standards prevailing, the Federation gave early attention
Currently; it has six schools stThtegia1ly sited throughout
to this problem.
A further eight
the countryside, primarily for ruxal agricultural ethcation.
schools are now either in being, set up or planned, as also a "superior school
This latter for training campesino membership, its
for rural qualifications".
sons and daughters, in rural planning, agricultural economy, rural administration,
The FCV also co-operates closely with the Agrarian Institution in selectetc.
ing pupils from among membership for participation in courses provided by INA
on mechanisation, including the upkeep of agricultural machinery.
The full impact of an organisation such as the Venezuelan Campesino
Federation using those forms of servicing which are most urgently required by
membership, is seen in the degree to which it has contributed to rural change
since its inception.
The previous latifnndia (large land estates) are
increasingly being substituted by small- and medium-size farms run by campesinos.
It has also played a major role in the allotment of more than 2,600 hectares to
140,000 rural families to date, and through its association with the Agrarian
National Institute and the Ministry for Rural Affairs, in ensuring the construction of 50,000 homes built on land distributed under the Agrarian Reform
Programme.
It can also claim to have made a major contribution through its
represeatatives to the development of irrigation projects which in six years
have converted 72,000 hectares of dry lands into good farming land.
Pederacion de Trabajadores de la Cana de
Azucar y sus Derivados de Venezuela
(FET.RACADE)
FETRACADE, catering for the workers in the sugar industry and a further
IFPAAW affiliate, is also running a number of highly successful consumer cooperatives on behalf of membership which it is claimed has done much to reduce
inflated prices previously paid for necessities.
Much more of course remains to be done but in Venezuela both the campesinos
and the sugar workers are seeking to fully utilize the co-operative/trade union
approach in all ways possible on behalf of members.
FANAL - Colombia
This organisation which claims a massive membership throughout the
Colombian countryside and was established in 1960 is also an affiliate of IFPAAW.
Its activities are devoted to similar services to membership as that of the
Campesino Federation in Venezuela.
It played a major role in the land
"invasions" which preceded agrarian reform, and is affiliated to the national
centre, UTC.
Its activities in the wage-earning sector are shared with the
agricultural sector of the UTO.
This division of control has created certain
problems for FANAL, particularly in relation to finance, and consultations with
a view to resolving these are now taking place.
Although not servicing o.ver so
wide a scope as its Venezuelan counterpart, this Federation conducts a wide range
of co-operative activities.
These include the formation of producer and consumer co-operatives, and the setting up of credit unions, in which activities it
co-operates closely with the National Saving and Credit Society, UCONAL.
There
has also been some development in agricultural marketing on behalf of membership
and in the setting up of co-operative farms although these have not to date been
fully successful.
Currently PANAL's co-operative division, UCOPAN, which has already
twelve farm co-operatives in being, is looking for new methods of approach
PANAL is
whereby this form of activity can be more successfully developed.
active throughout the whole of rural Colombia, where its representatives
frequently operate under considerable hardship and with extremely limited funds.
It has received assistance from the American Institute for Free Labour Development (AIPLD) in the setting up of a campesino training centre, while the
daughters and wives of campesinos also receive special training at an institute
run by the Catholic Church.
- 23 -
Unlike its counterpart in Venezuela, PANAL in Colombia, has yet to
find a good relationship with the National Agrarian Institute, INCORA, which
It has, however, membership on the INCORA
appears to regard PANAL as a rival.
National Board and at regional level and is seeking to improve this relationship
with IPPAAW advice and assistance.
Despite these problems PANAL continues being instrumental in influencing the life of the Colombian rural worker throughout the country, this through
various forms of servicing which, in addition to those referred to, includes
massive educational and organisational activities, in which IFPAAW is participating.
ANACH - Honduras
In Honduras, the campesino organisation ANACH catering for the same
class of membership as those referred to above, was re-established two yeara
Since re-establishment and as a result of
ago with IFPAAW assistance.
educational and organisational activities, assisted by IPPAAW Assistant
Representative, Jose Jesus Vargas, and following a difficult initial period, it
now enjoys full government recognition and works in close accord with the
National Agrarian Institute (INA).
One of the first attempts at seTvicing membership, following
rehabilitation, was the enrolment on a voluntary basis of medical students and
nurses through whom, and with a gift o± drugs from the USA, it was possible to
open a rudimentary medical co-operative from which visits to key areas were made
This service has now been greatly improved and
at monthly intervals.
activities have been further stimulated by the gift of a vehicle from the
"Committee for Latin America Co-operation USA" to assist in this work.
Following the difficult initial period referred to, in which relations
with the National Agrarian Institute (INA) were badly strained, these, with the
aid of IPPAAW Assistant Representative Jose Vargas, have now greatly improved.
As a result and in recognition of its attempts to develop co-operative
servicing for membership, the Government has now made a grant of lempiras 30,000
Further(1 lempira = 50 US cents) to ANACH to help finance these activities.
more it has donated a twelve-seater landrover, to enable ANACH representatives
to cover the wide areas in which it operates, with "no strings" attached.
A further recognition is the provision of credits to the value of
lempiras 150,000 advanced by the National Development Bank, specifically for the
These funds are administered by
stimulation of ANACH co-operative activities.
the ANACH Technical Co-ordinating Committee.
On the old thesis that nothing "succeeds like success", an agrarian
adviser to assist membership in developing better techniques of farming has now
been made available to ANACH from the US Peace Corps, at no expense to ANACH.
Despite its youth and past disillusionment of membership, ANACH has
already collected 60,000 lempiras from its members for co-operative activities
which, together with the credit made available by the Development Bank and the
Government, has enabled it to commence both producer and consumer co-operative
developuient.
Under the A1\1ACH arrangement with the Government and the Development Bank, the interest charge made to co-operatives established with assistance
from the Fund and linked to the Federation, is 9 per cent, 7 1/2 per cent of
which is paid to the Bank, 1 1/2 per cent reverting to the ANACH Central Cooperative Fund.
A series of highly successful educational training and organising
activities with special emphasis on co-operativism under the direction of IPPAAW
representative, Vargas, are being carried out continuously.
- 24 There is rio doubt that the relatively good progress made by ANACH has
been greatly stimulated by the example given by a further IPPAAW Horiduran
affiliate, SITRATERCO, a banana workers' 'union with 11,000 members which plays
an important role in the affairs of the Central Trade Union Organisation, 0TH.
Although SITRATERCO was only recognised in 1954, it has already secured the best
wages and conditions for membership throughout the banana zone of Central
America.
Its leaders recognised however that even success of this kind was not
enough; membership still had many problems: indebtedness, illiteracy, lack of
social awareness, etc., all of which called for union action.
Because of this,
a loan of 800,000 lempiras was negotiated from USAID in the early sixties, which
This was successwas used to establish a housing co-operatives fee membership.
ful in building 184 houses, 76 sa_uare metres each, on plots of 300 square metres
As a
and on land on which electricity, water and sanitation was provided.
result of this and because the uniOn had negotiated for the land and full services
to be made available as a grant from the company, the cost to membership was as
low as 4,100 lempiras per house which was made available at an interest rate of
& successful was this beginning and so impressive was the improve6 per cent.
ment in social awareness on the part of those participating, that the union has
It again approached the
continued development of this phase of activities.
employers who had previously made an extremely low standard of housing available
for membership and negotiated a grant of 3 million lempiras to the union for
As a result, 192 further houses have
investment in its housing co-operative.
been built to date at a value, including land, of 6,000 to 9,000 lempiras each,
according to type, but again thanks to the union's negotiation of the above
A further 900 houses
grant, these are available to members at half this price.
are reported as under way in the immediate future and continued activity
envisaged, financed from reimbursement of loans in process of repayment.
In 1959, the union approached Government in seeking action aimed at
price cOntrol.
This was not successful and in that year the union set up its
So successful did this prove that five further
first co-operative store.
These are
stores have now been strategically placed throughout the rural area.
also open to non-members who, however, receive only a partial discount on
So successfully are these stores
purchases as compared with union membership.
operating that they have brought about a substantial fall in over-all rural
prices for essential commodities sold in these co-operatives.
The 'uniori next sought to give greater protection to dependants of
members in the event of death and just over a year ago established a death
This now has 3,300 members and gives benefits according to
benefits scheme.
the amount paid and length of membership and is reported as filling an urgent
need for the dependants of members.
A further problem common throughout the developing world was the
degree to which membership, despite these improvements, continued to fall into
the hands of the moneylender, who frequently charged such fantastic rates of
Because of
interest as to make escape from his clutches well-nigh impossible.
this a credit union was established in 1968, and already 8,000 of the 11,000'
union members are receiving loans which, in the first year of operation, totalled
1 1/2 million lempiras and which are expected to top the 2 1/2 million mark
during the current year.
The union has also played a prominent role in the establishment of the
Workers' Bank recently set up in Honduras.
Having consolidated its position in these fields and now being
relatively financially strong, SITRA.TERCO next turned its attention to the very
Here, as a
low educational standards prevailing throughout the rural area.
result of co-operation with parents' organisations, and further negotiations
with employing interests, it is now running, jointly with the Government and the
parents' organisations, fourteen schools conducted in premises negotiated from
These schools are also open to the non-wage-earning
the employing company.
sector, i.e. campesinos non-members' children, and are making an important contribution to rural improvement and extending education throughout the Honduran
countryside.
- 25 -
Again, in conjunction with the parents' organisations, SITRATEROO took
This is now being rim
over a college which was then in financial difficulty.
very successfully with the best teachers available, its activities being financed
It next introduced
by the union, its co-operative branch and fees from pupils.
a special workshop extension which will enable pupils leaving the college to take
up semi-skilled work to enable them to earn their way through the university if
Prior to the introduction of this college and workshop, it was
they so wish.
practically impossible for workers' children in Honduras to ever reach a
This union has also pioneered literacy programmes in rural
university.
These are run jointly with the Government, the union and its coHonduras.
operative branches and during the first year of activities 600 adults attended
On finding that the usual techriiques of literacy
the courses provided.
teaching were not impacting as fully as they should, new teclmiques of teaching
have been developed, whereby words comnected with members' work and their union
were introduced to enable them to understand more clearly. For instance, the first
This new approach is reported
word now taught is the union name "SITR&TERCO".
as very successful.
Pederacion Nacional de Campesinos
del Peru (PENCAF)
This organisation claiming some hundreds of thousands of members
throughout rural Peru has played an active role since its formation in the early
fifties in furthering the interests of the rural workers of Peru, giving special
It is an
attention to the Indian communities in the remote ndes areas.
affiliate of the National Centre, CTP, and established a special branch for coIt then had 44 co-operatives active,
operative activities as long ago as 1968.
62 in the organisational phase.
43 more in the process of registration and
Five of these were of the agricultural producer trpe, while the others were concerned with marketing or bringing consumer benefits to membership.
Unfortunately, its efforts, together with the National Centre (CTP),
to set up a workers' bank through which credits could be made more easily
available for co-operative development and for its members, continued to be
frustrated.
PENCAP is now seeking to consolidate and extend activities,
particularly in co-operative development, in co-operation with the government
programme.
Pederacion de Trabajadores Azucareros
del Peru (PTA)
The position of IPPAAW's second affiliate in Peru, the 11,000 PTA,
which is a sugar workers' federation, established as long ago as 1960 with
Some years ago it established an extremely
IFPAAW assistance, is also difficult.
So successful was this
well-run co-operative in the interest of membership.
operation, and possibly because of difficulties in relation to return of profits
to t'he USA, that the then US-owned sugar central for which this Federation's
members worked entered negotiations for this to be taken over and run by the
Federation on a co-operative basis.
The junta has now nationalised the industry, including the sugar
central in cjuestion, much to the indignation of the workers, who looked to
running this as shareholders in their own co-operative.
In Ecuador one of the most recently established campesino organisations,
PENACL which, with IPPAAW assistance, was founded in 1969 and which has already
affiliated on a membership of 5,000, is extremely active.
In addition to the usual representation on behalf of its wage-earning
sector, it is carrying out an intensive organisational and educational campaign
in association with IFPAAW and the National Centre, the CEOSL, and is giving
particular attention to advising and assisting in co-operative development at
- 26 In these activities it works closely in association with the
the rural level.
government agency PECOPAN, to which all agrarian co-operatives formed are
So impressed was the Government b31 these
legally reQuired to affiliate.
efforts that the Government on 16 June 1969, made a grant of US$1,000 to this
organisation to assist in furthering activities.
Currently, IPPAAW local organisers under the direction of our
representative and two assistant representatives, are operating throughout
Central and Latin America where, in addition to the countries named, activities
In all these countries
are mainly centred'in Bolivia, Guatemala and Panama.
and at a lesser phase of development, campesino organisations exist and are
seeking to provide similar servicing to membership as has been described above.
In Asia, IFPAAW Malaysian affiliate, the National Union of Plantation
Workers troubled by increasing redundancy among its members owing to large-scale
±ragmentation of estates and consequent increased unemployment has set up the
This is in fact a union-sponsored co"Great Alonioners Trade Co-operation".
operative, mainly finanOed from union shareholders and was registered as a corporation owing to difficulties at that time in registering it as a co-operative.
Soon after formation on 31 December 1968, M$468,729.50 (1 M$ = US cents 33.1/3)
had been raised from members in relation to 937,759 1$ shares which were at the
time 50 Der cent paid up.
This, plus applications pending allotment of
M$714,479.42 and calls received in advance for M$1l2,180 makes a total of
M$l,295 ,388.92.
Since that date, considerable further progress has been made and two
highly productive rubber estates have been purchased, valued at M$3,164,800
while as registration difficulties have now been overcome, a newly-established
National Multi-Purpose Co-operative Society has been registered with a view to
taking over the affairs of the Great Alonioners Trading Corporation.
We also understand that a further estate has now been purchased in the
name of the National Multi-Purpose Society and it is intended that the earnings
from these estates will provide the basis for the establishment of a general form
of co-operative servicing to membership throughout the countryside.
The size of this operation and its future potential is indicated by
the fact that the IT!JPW negotiating on behalf of the National Multi-Purpose
Society and its corporation is currently discussing the possibility of a long-term
loan of M$l0 million with the International Co-operative Bank in Basle,
Switzerland, through and in conjunction with its international federation IPPAAW,
once agreement on interest rates can be reached.
These are the latest developments in a series of wide forms of
servicing to membership by this affiliate, which include the building of three
hostels, at which members' children can stay to obtain the secondary education
which is not available at estate level.
It has also provided each year a
number of scholarships for members' children at various levels both at home and.
abroad.
This in addition to running its own newspaper and playing an active
part in trade union affairs through the Malaysian National Centre, MTUC, to
which it is also affiliated.
In Ceylon, IPPAAW affiliate, the Ceylon Workers' Congress, has also
begun similar activities.
The CWC has carried out a magnificent struggle in
the interests of a large sector of membership and in many ways.
Among the latest of these has been the raising of funds from members
for the setting up of Ethoka Limited which again, owing to technical difficulties,
it was not possible to register as a co-operative.
It is however run on a cooperative basis, the majority o± its directors being worker members of the union
and has already purchased land on which it is hoped to settle redundant labour
from the over-crowded tea estates and for development as a general co-operative
in the interests of membership.
- 27 -
In India our south Indian affiliate the Neelamalai Plantation Workers'
Union, has recently anuouncea the setting up of a consumer co-operative for its
An extremely good example of such activity is
18,000 members on the estates.
also shown by 'a further affiliate, the Sakhar ICamgar Sabha Shrirampur in
Meharashtra, India, which although relatively small, has been rumiihg an
extremely successful consumer co-operative for just over 4,000 members for many
years.
This union also, as a result of negotiations with employing interests
and support raised from srmpathetic 'unions in the West, built and successfully
runs a fine hospital as part of its medical service for membership.
In Viet-Nam, IPPAAW affiliate, the Plantation Workers' Federation,
set up a peasants' organisation similar to the campesino organisation of latin
This was founded on a well-conceived plan
America early in the Diem Régime.
for the distribution of fertilizers on co-operative principles and at costs
So successful was this, that
lower than those charged by the then suppliers.
Other activities, however,
it was eventually taken over by the Diem Régime.
continued and a year or so ago the right to distribute fertilizers to membership
was restored and despite the many and difficult problems confronting our friends
in Viet-Nam, this is now reported as thriving.
Further reports indicate that the confederation has recently successfully established a fishermen's co-operative, while the plantation federation,
again working in conjunction with its confederation, has successfully carried
out a number of self-help housing projects on behalf of refugee plantation
workers on the outskirts of Saigon.
A further instance of successful trade 'union/co-operative activity in
Asia is the setting up, with IPPAAW advice and assistance 'by IFPAAW Philtppine
affiliate, the Free Farmers' Federation, of a fertilizer co-operative open to
This started in 1966 with only forty members through a deposit
membership.
made on behalf of but not granted to the PPF of US$5,000 with the Esso Fertilizer
Company.
According to the 1969 report membership was some 2,000 and total
US 25 cents).
assets of pesos 169,838.73 (1 peso
Activities have been further extended to include a rice milling
project and provision of three small hand oultvators for hire to membership,
Since
while a number of irrigation pumps are also available and much in demand.
the formation of its co-operative branch the Free Farmers' Co-operative Inc.
(FF01), this branch has considerably stepped up educational and training
activities, giving particular attention to agrarian techniques and co-operative
management.
A further example of activity in the adoption of co-operative techniques on behalf of membership is given by yet another IFPAAW Philippine
affiliate, the Associated Labour Union-AFL-VIMCONTU, operating mainly in the
island of Cebu.
Here the ALU which also runs its own broadcasting station and caters
for a membership drawn from all sectors of industry, including plantations, has
developed a very fine medical service, run on a co-operative basis, is also an
extremely successful consumer co-operative for membership.
Both are 'based in
close proximity to ALU headquarters in Cebu but also service membership throughout the rural areas - the medical service through its mobile clinic and the cooperative through branches linked to the AIJU headquarters.
In Indonesia where the trade union movement is extremely fragmented
and, despite claimed high membership, regrettably weak, the state of the economy
is also such as to make wage negotiations almost meaningless.
Because of this,
a number of unions are increasingly looking to developing various forms of cooperative servicing on behalf of membership.
Many of these, owing to lack of trained personnel and for other
reasons, have not been successful.
Even so, the Railway Workers' Union shortly
after its inception in the fifties, ran a very successful consumer co-operative
on behalf of members.
- 28 -
In the island of Sulawesi, where IPPAAW is assisting and advising in
108.
the development of a campesino type of organisation, NITASI, though only
registered just over two years ago, has made considerable progress among a membership where the annual family income is estimated at the equivalent of US$60.
In these circumstances, the operational approach has from the
109.
beginning been on Oo-operative forms of servicing for membership coupled with
educational activities, linked closely to the requirements of a predominantly
In view of limitation of funds and of membership living
agrarian membership.
only on the fringe of a money economy, the co-operative activity to date has
been limited to simple projects in keeping with reouirements.
110. A fishpond run by the organisation on a co-operative basis has been
successfully establishea, as also a goat co-operative, on land granted as a
result of negotiations with the local military.
111.
Currently, efforts to market eggs in the nearest towns and to bring
back goods not readily available in exchange on a co-operative basis are being
made.
In keeping with this approach, a number of seminars have been given,
112.
typical of which was one in which the local branch of the National Agrarian
Here for the first time and among the subjects covered
Institute participated.
Key participants from
was animal husbandry and simple veterinarian practices.
each area have since been supplied with hypodermic syringes by IPPAAW and as a
result of their training and with drugs supplied by the Institute, are now
treating members' livestock for a number of the more common ailments.
113. A small rotating fund of US$500 has been established from which
these and future activities receive "starter" aid.
Among further projects
being explored are:
treatment for a silkworm fungus which has seriously handicapped silk
production, in which some 30,000 of the local population are engaged in
and
their homes;
introduction o± an improved loom by which the width of the finished
article can be increased.
With IPPAAW assistance, HITASI has been able to contact the Indian Silk Board
on this problem while IPPAAW has also sought the assistance of the PAO on how
best to combat the silkworm fungus.
In Africa activities of this nature have been slower in developing.
114.
Despite this, as long ago as 1964, IPPAAW's oldest Nigerian affiliate, the
Eastern Nigeria Development Corporation and Allied Workers' Union, with IFPAAW
assistance was able to train one of its officials at the Nigerian Co-operative
Training College.
This proved so successful that not only was an effectual
consumer co-operative developed on behalf of membership but also a training
centre, rim on a co-operative basis for wives and daughters of members for
producing women's clothing.
This in turn became so successful that it started
its own factory in the training centre which the 'union has built and sold its
This union was also able to
products to the Nigerian co-operative movement.
establish a training centre fitted with old eQuipment, negotiated at low cost
It was also able
and at which redundant members were taught simple mechanics.
to purchase six acres of land on which food was produced and sold through the
consumer co-operative, which included a well-eQuipped cold storage unit.
Unfortunately, the Civil War and its aftermath terminated these activities.
Pollowing my recent visit them, IPPAAW African representative Brother Kowlessur
is now stationed in Nigeria and plans are afoot for these activities to be
recommenced.
- 29 -
In the West, a further Nigerian affiliate of IFPAAW, the Western
Nigerian Development Corporation and Allied Industries Workers' Union has, with
the co-operation of IFPAAW, ILO and the Israeli Afro-Asian Institute for Cooperative and Labour Studies, been able to send one of their staff to the above
On returning to
Institute in Tel Aviv for a trade union/co-operative course.
his union this brother is now reported as running an extremely successful consumer co-operative on behalf of the membership, while plans for extending this
are now reported.
It is hoped that following my visit there, as referred to above, and
as a result of meetings with representatives of Nigerian subsistence agriculturists, it will be possible to establish the first campesino-type
This, as in the case of its counterpart in
organisation in Africa in Nigeria.
the Americas, will largely be devoted to further developing co-operative
An organisation, the Nigerian Agricultural
activities on behalf of members.
Development Association is now in being and currently there are plans for training two leaders of this organisation in Israel, as also for them to spend some
time following this training witI the various co-operatives which form part of
the Israeli movement.
As this is written we have just received a report from IFPAAW
African representative that, in conjunction with the Western State Co-operative
Department, shares are being sold to members of this organisation for the
establishment of a co-operative piggery.
In Ethiopia, our affiliate, the HVA Sugar Estate Workers' Union has
established a ttco_operative fund" and is running a highly successful consumer
A vehicle for the use of members and
co-operative at the main sugar central.
to enable their children to travel to school has also been provided.
As will have been seen, the activities referred to in this talk have
taken various forms, as for instance in Ghana, where tPPAAW affiliate, the
General Agricultural Workers' Union of TUC reports the successful running on a
co-operative basis, of a farm as an agricultural training centre.
One of IFPAAW's Kenyan affiliates, the Kenya Plantation and
Agricultural Workers' Union has also been able, some years ago with the help of
an adviser made available through the German Friedrich Ebort Foundation, in cooperation with IFPAAW, tO set up a successful consumer co-operative on one of
This union, in conjunction with the National Centre, COTU,
the larger estates.
is already discussing with IFPAAW the possibility of extending this form of
The problem here, however, as elsewhere, is the
activity over a wider field.
This lack is instanced by the problem of one of our
lack of trained personnel.
older affiliates, the Cameroon Development Corporation Workers' Union which, in
conjunction with IFPAAW for two years in vain sought the secondment of a cooperative adviser for assistance in developing this form of service.
Eventually, and because memberships1 needs were growing urgent and
in the absence of such an adviser, the constitution of the union itself was
changed in such a way that the union is now compelled to supply essential
commodities to its membership through a section established for that purpose.
A vehicle has been purchased which transports essential commodities from the
urban to the rural areas, returning with the produce of rural membership which
This has now been
is thep. distributed to urban members at reasonable prices.
running for some years and, though hardly a co-Operative as its activities are
under direct, as distinct from indirect union control, it is reported as
successful.
a
C onclus ions
In this talk I have not made specific reference to the magnificent
work done in this field by the Israeli labour movement, 1-IISTADRUT, particularly
One is that
There are two reasons for this.
through its agricultural sector.
the uniq.ue character and success in which trade union and co-operative activity
in the service of members and in national building has developed in Israel is
known to all.
- 30 -
Secondly the rapid shifting in emphasis from a primarily agrarian
economy to that of industry, is such as to challenge the validity of reference to
this country as less developed.
Suffice to say that the example given, coupled with the training
facilities offered trade unionists throughout the free world, through the Israeli
Afro-Asian Institute for Co-operative and Labour Studies are, in my view,
unequalled.
There are also of course other examples which may be known to you, as
for instance, the degree to which the trade union movement of Tunisia has
Instead I have sought to confine myself to
de'treloped co-operative activities.
those instances of which I have first-hand knowledge and in which IPPAAW has
been intimately concerned.
Some, as in Honduras, Venezuela and Malaysia, have developed on a
In each case they
major scale, some have been successful, some less so.
recognised that they were rumling functioning organisations in touch - as are
no others - with the masses.
They are also increasingly aware that poverty among the larger sector
of the population debars that sector from making any meaningful contribution to
economic and social progress - that in the combinatioii of trade union organiaing
and service with the adoption of Oo-operative tecbniqjies, a beginning to a new
More, much more is needed in the field
and necessary approach has been found.
of edu.cation; technicians for these wider forms of servicing must be provided.
Too often, the dangers of faiLire, resulting from lack of "know-how" continue
to prevent development elsewhere of the type of activity of which I have been
speaking.
The International Trade Union Movement and International Labour
Organisation through its various branches has helped and can help further in
this field.
IPPAAW since its inception has sought to encourage development of this
In addition to advising
nature among its affiliates in all parts of the world.
and servicing wherever possible and the rnnning of seminars at membership level,
special conference/seminars for leaders have been held, as for instance the
A later
IPPAAW Campesino Conference as long ago as 1967 in Caracas, Venezuela.
instance is a similar seminar/conference on "The Role of the Trade Union Movement
in the Developing Countries of Asia with Particular Attention to the Rural
Problem" (in August 1969) with the assistance of the Workers' Education Branch
of the ILO.
130.
in Africa.
stabilised
developing
agencies.
Branch and
and Labour
throughout
Punds permitting, a similar seminar/conference will be held in 1971
It has also, with ICPTU, supported efforts to provide assured and
markets, infrastructural development and financial credit for the
world through the observer representation enjoyed with various UN
Also with the assistance and support of the ILO Workers' Education
in co-operation with the Israeli Afro-Asian Institute for Co-operative
Studies, a number of scholarships are given each year to members
the world.
131.
The recent formation of COPAC - a Committee for the Promotion of
Agricultural Co-operatives - in the less industrialised countries should also
help in bringing necessary change.
Here are grouped the ILO, PAO and for the
first time, the International Co-operative Alliance, the International
Pederation of Agricultural Producers (IPAP) and my organisation, IPPAAW, for the
purpose of seeking to assist such development.
- 31 -
Bu.t ovei the wider field it is at th local level on which the
Union fragmentation must ceaSe in the
speed of future progress depends.
interests of replacing this by strong viable units capable of providing support
and assistance for co-operative development, extending this as conditions permit
to include those who have so long been ignored.
In doing so, new and direct hope can be brought to so many without
new stimulus to economic and social progress be created and new concepts
of government/trade union co-operation replace the all too freguent suspicions
hope:
of today.
This is indeed a target worth reachingl
- 32 -
Housing Co-operatives
by
G.S. DASS
Former Registrar of Co-operative Societies,
now General Manager, Co-operative Central Bank,
Malaysia.
The operation and management Qf housing co-operatives are more
involved and complicated than in other types of enterprises.
Numerous problems
and difficulties confront them in their endeavour to provide their members with
suitable housing accommodation at reasonable cost and on easy terms of payment.
The management committees of housing bo-opera-tives should therefore handle the
activities of the societies with great care and skill.
Any mismanagement, malpractice, misjudgement, misapplication of funds, inadequacy or lack of clarity in
the provisions of the Constitution are likely to render heavy financial losses
causing untold hardships o members and giving rise to serious repercussions.
Membership in housing co-operatives is composed largely of salary and wage
They participate in
They are generally of limited financial means.
earners.
the activities of housing co-çperatives with the hope of acquiring their own
homes as they are aware that it will not be possible for them to do so indiviIn order to acquire homes
dually in view of their limited financial situation.
through the housing co-operatives, they not only entrust their life savings but
also commit themselves financially to these organisations for periods extending
from fifteen to twenty years.
Housing co-operatives are independent, democratic organisations in
The management committees are
which the members have a say in the management.
elected by the members and they are entrusted with powers to manage the affairs
Housing co-operatives have a
of the society effectively and efficiently.
They are expected to acquire or purchase land, raise
difficult task to perform.
funds, engage the services of engineers, architects and contractors, construct
The develophomes and recover the cost from the members over a period of years.
Extreme
ment of housing therefore requires considerable experience and talent.
care should be exercised in the matter of purchasing land and in the planning and
It requires considerable talent and skill to
implementation of housing schemes.
raise funds for the development of housing schemes and such funds should be
It is extremely
obtained at reasonable interest rates on a long-term basis.
important to see that housing schemes are developed properly within the stipulaThe work of the
ted period and in accordance with the approved specifications.
In developing housing schemes,
contractors should be carefully supervised.
housing co-operatives should comply fully and completely with all the obligations
required under the various laws and also comply with the requirements of the
It will be observed that the actimunicipality and the authorities concerned.
They should
vities of housing co-operatives are indeed complex in nature.
therefore be properly organised and honestly and efficiently managed.
Types of Housing Co-operatives
The set-up and operation of housing co-operatives differ from country
For the purpose of discussion at this seminar, the following five
to country.
types are indicated:
co-operatives which entitle members to enjoy permanent occupation of homes
but retaining the ultimate ownership of these properties by themselves.
Members participating in these schemes acquire the rights to occupy the
If, for
premises by paying the stipulated costs over a period of years.
any reason, the members intend to give up the premises, they are expected to
do so through the societies which, in turn, will pass on the right of occupation to other members in the society;
housing co-operatives which undertake purely the function of providing
mortgage loans to their members to enable them to have their homes constructed in. the manner they desire by engaging themselves the services of
architects and contractors;
- 33 housing co-operatives whose primary object is to acquire suitable building
sites either from Government or private owners and after developing the sites
by laying roads, arranging the supply of light, water and other services,
transfer the subdivided building lots to the members on payment of the total
The members are then expected to construct their own homes
cost involved.
by raising their own finance and engaging the services of architects and
contractors;
self-help builders' co-operatives where the members construct their own
homes during their leisure with their own funds by engaging the services of
technical persoimel;
housing co-operatives which acquire land on behalf of the members, develop
them, construct homes for their members and allot the completed homes to
When
them and recover the cost of the homes and the development charges.
the total dues to the societies are paid, the societies transfer the
properties to the members so that they will have full control and enloy
Housing co-operatives in Malaysia operate in this pattern.
complete ownership.
For the information of the participants of the seminar, it is intended to describe
In
briefly the method of operation of a housing co-operative in Malaysia.
housing co-operatives only those who do not possess homes of their own are
admitted as members provided they are not members of any other housing coThe members are required to subscribe to a minimum number of shares
operatives.
Some co-operatives require their members to subas stipulated in the by-laws.
scribe at least one share each month towards the share capital as long as they
Each share is normally fixed at $10.
are indebted to the society.
137. The society acquires land, develops and subdivides it into building
lots and allots them to the members strictly in accordance to seniority as mainThe members who participate in a housing
tained in the membership register.
scheme are required to pay for the cost of the building lots together with
They are given the option to
development charges within a stipulated period.
The
transfer 80 per cent of their shares in the society toward this payment.
society will then proceed to have designs prepared of four or five types of homes
The designs will then be
by using the services of the society's architects.
circulated to the participants requesting them to make a selection within a given
The plans of the homes will be so designed in order to ensure that the
period.
The society will also
homes are within the financial means of the participants.
indicate the estimated cost of the homes to serve as a guide to the participants
When the participants have made their
to enable them to arrive at a decision.
selection, the architect would be directed to submit the plans to the authorities
When the clearance is obtained the members would be
for necessary clearance.
requested to make the necessary down-payments (usually one-fifth of the value of
the homes or such anount as stipulated in the by-laws) within a certain period.
Here again, the society will offer the members the opportunity to transfer
The society, in order to
80 per cent of their shares to meet the down-payments.
undertake the development of a housing project, will negotiate with lending
In order to do this, the society will have to
institutions for a long-term loan.
obtain the approval of the Registrar of Co-operative Societies to borrow funds
and for this purpose will have to submit to the Registrar a certified copy of the
resolution of the general meeting empowering the management co-operative to raise
In forwarding the application, the society will have to furnish to the
loans.
Registrar details of the scheme, the rate of interest to be offered for the loan,
the source or sources of the loan and partiqulars of the balance of loan incurred
When the loan is assured
in respect to development of previous housing schemes.
The management committee
the society will then take steps to invite tenders.
will consider the tenders carefully with the guidance of the architect and then
An agreement will then
decide to award the tender to the successful contractor.
be entered into for the completion of the scheme between the society and conThe society would be required to utilise the funds raised by means of
tractor.
down-payments from the members initially and then only will the lending organisaThe completed
tions commence to advance funds for the completion of the scheme.
homes will be allotted to the participants after they have executed the Memoranduni of Lease of some similar agreement in which they undertake to repay the loan
together with interest within a period of ten to fifteen years as provided for in
The by-laws of the society empower it to charge an interest of
the by-laws.
1 per cent (in some cases 2 per cent) above the rate of interest that it borrows
The society will have to ensure that
for the development of housing schemes.
the con-tractor, with the assistance of the architect, obtains a certificate of
- 34 -
During
fitness for the occupation of the homes from the authorities concerned.
the period of the loan the society will undertake to see that the homes are well
maintained, repairs are carried out as and when necessary and the properties are
insured against damage by fire, flood and other hazards including civil riots and
commotion.
The society will recover the charges from the participants.
It will
be the duty of the society to ensure that prompt repayments are made.
If any
participant defaults repayments, then the society will take all necessary action
to repossess the home.
When the loans are completely repaid, the homes are
transferred to the participants who will take full and complete ownership of the
properties.
Problems in Housing Co-operatives
138.
The problems confronting housing co-operatives are:
Land
Finance
Trained and dedicated personnel for management ci' the day-to-day
affairs
Keen competition from private building agencies and developers
Democratic nature of the operation of housing co-operatives
The problem of land is such that it is difficult to find a satisfactory
Suitable building sites are generally scarce in the towns and, if
available, they are very expensive, often beyond the repaying capacity of the
participants.
It therefore becomes necessary for housing co-operatives to
develop housing schemes away from the city and town limits where the prices of
land are comparatively cheaper but transport becomes expensive and the supply of
water, electricity and other services may not be adequate.
Developing a
housing scheme outside the city and town limits poses another problem and, that
is, private lending institutions are reluctant to advance loans on the security
of such schemes.
Here again,
The other alternative is to erect flats.
members do not desire flats for various reasons.
They claim that adequate
facilities are not available in flats for recreation of growing children.
They
dislike flats on the ground that living in apartments in flats affects privacy
and, further, the properties generally are not well maintained as the occupants
are drawn from various educational and social backgrounds having different
Malaysians, in particular, are very
attitudes towards hygiene and cleanliness.
In
fond of gardens and, as such, would prefer single or semi-detached homes.
any case, the day is fast approaching when members will have no alternative but
to stay in flats.
It is of interest to note that the acute shortage of land in
the Republic of Singapore and the Colony of Hong Kong has made it absolutely
necessary for people to live in flats.
The situation is different in Malaysia
at the present moment.
solution.
In acquiring land for the development of housing, extreme care should
139.
be exercised.
Failure to do so will cause the society untold difficulties and
inflict unnecessary hardship to the members.
Before purchasing land for development, several factors will have to be considered, especially matters such as cost,
availability of supply of light, water and other services, suitability of the
land for the development of housing, distance from the town centre, the availability o± public transport system in the area, the physical nature of the land
in order to determine the cost that would be involved to make it suitable for
development of housing.
Care should also be taken that the cost of the land has
not been inflated by land speculators.
The problem of raising adequate finance at reasonable interest rates
140.
The developranks second only to the problem ci' land in housing co-operatives.
nient of housing is a big venture and perhaps the most difficult of all ventures
The problem becomes even more involved in
hitherto undertaken by co-operatives.
Obtaining
view of the fact that the members are of limited financial means.
finance is a difficult matter and particularly funds that are required on a longThere are limited numbers of lending institutions which are
term basis.
Commercial banks are generally
interested in providing this type of loans.
reluctant to consider long-term loans but, if at all, they come forward to grant
- 35 loans to housing co-operatives, they expect the loan to be repaid within a short
The conditions
period and the interest rates charged are comparatively higher.
of the loans are such that it will not be possible for the members to meet their
Terms and conditions o± loan from finance companies are not
obligations.
favourable and, in any case, they have not shown any interest in the past to proThe best source of obtaining finance for
vide loans to housing co-operatives.
housing co-operatives is from organisations such as the Employeest Provident Fund
These organisations have substantial funds for investment on a long-term
Board.
In Malaysia the Employeest Provident Fund. Board granted loans in a few
basis.
instances in the past to housing co-operatives but it has discontinued now on the
grounds that the law which regulates the investment of the funds of the Board
Although overmnent
does not permit it to invest in co-operative organisations.
has provided loans to two housing co-operatives in Malaysia, it is most unlikely
Housing cothat funds will be forthcoming from this source in the future.
operatives in Malaysia have therefore to depend heavily for funds on the other
Fortunately, in Malaysia the thrift and.
sectors of the co-operative movement.
They are
loan societies have substantial financial resources at their disposal.
now coming forward to assist housing co-operatives with loans on favourable terms.
The Co-operative Central Bank has been reorganised with a view to mobilise as
much surplus funds of the movement as possible to provide timely and. adequate
The Malaysian Co-operative Insurance Society is
loans to needy co-operatives.
This being
another organisation which provides loans to housing co-operatives.
so, the housing co-operatives in Malaysia are extremely fortunate in that they
could. obtain the required funds for the development of housing schemes from
within the inovement itself.
It must be stressed. that housing co-operatives should. maintain correct
and lasting relationships with lending organisations by operating the societies
in an honest, sound and efficient manner and by making their repayments to the
lending organisations promptly in accordance with the terms and conditions of the
Default in payments or mismanagement of housing co-operatives
loan agreements.
will lower the confidence of the lending institutions, thus making the problem
Before embarking into the development of
of raising funds even more difficult.
housing schemes for the members, housing co-operatives should ensure that the
members fulfil their obligations by paying the down-payments as required in the
It must be remembered that lending organisations, be they coconstitution.
operative or otherwise, will make funds available up to two-thirds of the value
It must be stressed here that under no cirof the properties -to be developed.
cumstanoes should housing co-operatives venture into housing projects without
securing the required funds or by taking chances that funds would be forthcoming
Such a plunge is likely -to cause disaster if the expected. funds
in due course.
are not forthcoming.
Many of the setbacks, shortcomings, pitfalls hitherto encountered by
housing co-operatives were due to lack of honest, sincere and dedicated manageIn order to overcome this problem, it is of paramount importance
ment personnel.
that housing co-operatives be constantly vigilant that only the right type of
people are elected to management committees and that qualified and experienced
Furtherpersons with the right aptitude are appointed to serve the societies.
more, constant and continuous training programmes should be undertaken for the
benefit of the employees to ensure sound, efficient and effective management.
The terms and conditions of employment should be commensurate with the duties and
responsibilities entrusted to them and. thus eliminate feelings of frustration and
Housing co-operatives these days have to face keen competition
discontentment.
This is causing yet one more
from private building agencies and developers.
It must be remembered that profit is the
problem to housing co-operatives.
motive of private developers, whilst housing co-operatives endeavour to provide
service to the members at minimum cost and profit, if any, is therefore kept to
In order to compete with private developers the housing cothe bare minimum.
operatives will have to provide the same facilities and amenities as those proPrivate developers and agencies tempt prospective home
vided by them.
purchasers by providing additional benefits, firstly, because they have substantial financial resources at their disposal and, secondly, their margin of
In any case, the co-operatives, besides providing
profit is generally high.
cheaper homes and on easy terms of payment, have also to provide the same facilities and. amenities to withstand the competition posed by private developers.
It is therefore necessary for housing co-operatives to explain to the members
-the various benefits they stand to enjoy - low interest rates, less down-payments,
longer periods of repayment, dividend. on shares, higher standard of homes, etc. by participating in the schemes initiated. by housing co-operatives.
- 36 The democratic nature of the operation of housing co-operatives tends
Unlike private
to create problems between management committees and members.
It
enterprise, members in housing co-operatives have a say in the management.
is not an easy matter to satisfy all the members and quite often conflicts of
It is
ideas and opinions emerge between the management committees and members.
not uncommon to observe that interests of the members and the societies tend to
Members, not appreciating fully the aims,
pull in opposite directions.
objectives and nature of operation of housing co-operatives and the various
problems encountered, tend to extract from the societies as much benefit as they
Such a situation gives rise to frequent irritation and mispossibly can.
understanding between the management committees and members.
It is also
observed that because of the democratic set-up of the housing co-operatives, it
is possible that, at times, members most unsuited and with very little time to
spare elected to serve on management committees.
This is one of the greatest
setbacks arising out of democratic systems of management.
The solution to the
problems that emerge as a result of democratic operation is to constantly keep
the members informed of the various activities of the societies by means of newsletters, journals and other publications.
There should also be an effective
public relations system in operation in the societies.
It is also advocated that
members of the management committees should make every effort to meet the members
at large from time to time.
Regular training programmes should also be instituted for the benefit of the members.
Size of Housing Schemes
Before embarking on develOpment of any housing schemes, careful consideration should be given to the size of projects envisaged.
Factors such as
finance, the area of the land available for development, the cost ol' the schemes
to be developed, the availability of supply of water, electricity and other
services in the area to be developed, the ability and experience of the management committees to cope with the numerous functions which entail in the adrninistration and management ci' the schemes, the period required for the completion of the
projects and, finally, the capacity of the architect to supervise effectively the
construction work involved should be taken into consideration to assess whether
or not the schemes are within the capacity of the society to undertake without
any hitch or difficulty.
It is possible that due to enthusiasm, the notion that
the development o± large' housing schemes would affect reduction in the cost of
construction may tempt housing co-operatives to venture into projects far beyond
their ability to fulfil.
Such a plunge will likely be disastrous with serious
repercussions.
A slightest pitfall or mismanagement in the execution of the
schemes or delay in the flow of finance will either halt or slow down the rate of
progress which, in turn, will inflict hardship or financial losses to the
societies and their members.
It is therefore of paramount importance for
management committees to see that the housing schemes envisaged are viable,
practicable and manageable.
Constitution ci' Housing Corporation
It is advocated that in drawing up the constitution of housing cooperatives, care should be taken that adequate provisions are made for the smooth
The powers of the management.
and efficient operations of the societies.
committees should be clearly defined that there should be no ambiguity or lack of
clarity in the provisions of the by-laws in order to avoid any indecision on their
There should also be adequate provisions in the by-laws empowering the
part.
management committees to acquire land on behalf of the societies and to enter
into contracts in all matters relating to the activities of the societies; to
appoint, suspend, dismiss all salaried employees and to determine the terms and
The
conditions of employment and to detail their duties and responsibilities.
powers of the general meeting should be clearly defined in order to avoid conflict
between the management committees and the general meeting.
Legal Service
As housing co-operatives are complex organisations and as they have
to deal with numerous government departments and authorities, contractors and.
lending institutions and also having to enter into numerous contracts between the
members and the societies and other parties, it is very strongly recommended that
the services of legal personnel be retained to advise the societies on legal
matters and. to act on behalf of them when drawing up contracts and other legal
documents.
- 37 -
Annex A
Planning and Implementation of a Housing Scheme
In discussing this paper we must remember that the planning and
implementation of a housing scheme should conform with the provisions of the bylaws of housing co-operatives and the Co-operative Societie& Ordinance and Rules.
The procedure laid down in this paper is in respect of the development of housing
schemes that are acceptable and popular in Malaysia, i.e. that homes are constructed by housing co-operatives with a view to having them transferred to the
members when they have paid in full the cost of the properties together with
interest and other dues.
In planning and implementing a housing scheme of the type indicated
above, the following procedure should be adopted:
(i)
(ii)
there should be a sufficient number of members coming forward to partiThey should indicate this in writing;
cipate in a housing scheme.
if the intending participants are more than the number required for any
particular scheme, then the selection of participants should be in accordance to their seniority as maintained in the membership register.
The Committee should be vigilant in the matter of acquiring land.
Obtain valuation
Inform the members of the location of the land to be acquired.
report of the land to be purchased from qualified and registered valuers.
Ascertain the price levels of land in the vicinity, consult land office or the
Consult the
office of the authority concerned regarding particulars of the land.
Town Planning Office, Water Department, National and Electricity Board and other
relevant department as regards the suitability of the land for development of
Examine carefully whether or not the price of land to be
housing scheme.
Check the distance
acquired is within the repaying capacity of the participants.
Ascertain
whether
public
services
are
available
in the
from the town centre.
Also ascertain when the land has been transferred to the existing owner.
area.
This is to establish whether the land has been passed from one person to another
in order to inflate the prices, knowing that the society would be ultimately
purchasing the land.
If it is decided to acquire the land, inform the participants, conveying to them the likely cost of building lots and the development charges.
Request payment for the lots as stipulated in the by-laws within a certain period.
Purchase the land in question by enterEnter into negotiation with the vendor.
ing into a written agreement (use the services of the societyts legal adviser)
and have the land transferred to the society.
Request the societyts architect to draw up lay-out plan by giving
instructions as to the number of lots desired, the area of such lots and the
number of types of homes to be constructed, indicating the estimated value of
each type.
Instruct the societyts architect to submit lay-out plans to the
Also consider the suggestion and
authorities concerned for necessary clearance.
advice of the architect before arriving at a decision in regard to the lay-out
plan.
Then the lay-out plans are cleared, inform the participants and request
them to confirm whether or not they still wish to proceed to participate in the
The participants should give letter of indemnity to this extent.
scheme.
Instruct the architect to design four or five types of homes (as many as desired,
taking into consideration the size of the scheme and the financial background of
At this stage, the lots may be allotted to the participants
the participants).
if the society considers it desirable or refrain from doing so until the homes
If the lots
There are merits and demerits in this procedure.
are completed.
are allotted, participants will be glad to know the exact location of their lots.
On the other hand, this can lead to numerous problems, harassing the construction
to give better finish and also complaints and allegations may emerge suggesting
that the homes of certain members are given better finish, etc.
- 38 -
Whilst designs are being drawn up, the society should negotiate for
loan for development of the scheme.
For this purpose an application should be
made to the Registrar of Co-operative Societies seeking his approval to raise
loans for the completion of the housing project as required under the co-operative
societies' laws.
In submitting an application to the Registrar, details of the
scheme envisaged, the amount of loan required, the rate of interest payable, the
period of the loan and the security to be offered for the loan should be
furnished.
Information should also be given regarding the society's previous
borrowings and the balance due on such borrowings.
The source or sources of the
new loan should be indicated.
A certified copy of the resolution of the General
Meeting which empowered the Management Committee to raise loans together with the
latest balance sheet should be forwarded to the Registrar.
Lending institutions
will consider loan applications only if the Registrar's Order is available.
The
maximum that lending institutions will normally advance is two-thirds of the
value of the property as assessed by them and funds will be made available only
when the remaining one-third has been expanded by the society in the scheme and,
further, the lending institutions will issue funds in stages based on the amount
of work completed as certified by the architect.
It is important that a loan
agreement be entered into by using the services of the society's legal adviser.
Do not venture into any building project on the strength of any uncompleted loan
transaction or by taking chances that loan would be forthcoming.
When the designs are ready, the participants should be provided with
an opportunity to select the types of houses.
The society should guide the
members in this matter.
The earning and repaying capacity of the participants
should be taken into account.
Suggestions for alterations and amendments to the
designs may be allowed but should be kept to the minimum.
The design should be
displayed in the society's office.
Once the selection is completed, the
architect should be instructed to submit the plans and designs to the authority
for clearance.
When the plans are cleared and when the society is ready to
commence with the development of the housing scheme, participants should be
requested to make the down-payments as required under the by-laws within a stipulated period.
Care should be taken to see that these payments are not demanded
earlier than necessary.
Should there be any undue delay in the commencement of
the scheme, problems will crop up.
Dissatisfaction will arise leading to
unnecessary disputes and troubles.
Nor should the participants be allowed to
delay the payments, otherwise they will be responsible for holding up the smooth
operation of the building project.
At this stage, the society should invite tenders for the completion of
the scheme.
Details of the scheme and all necessary specifications should be
provided for this purpose.
The tender should be invited through the medium of
the press.
Clear instructions should be given as to how the tender should be
submitted, the amount to be deposited, to whom the tender covers should be
addressed, and the closing date of the tender.
The Management Committee should
meet after the closing of the tender, examine the tenders closely, register them,
deliberate on the subject, seek the advice of the society's architect and
ultimately decide as to whom the tender should be awarded.
In considering the
tenders submitted, the Management Committee should examine that the prices quoted
are reasonable and the extent to which they conform with the estimate of the
society, the period required by the contractors to complete the scheme and the
experience and financial status of the contractors concerned.
It is not always
advisable for the Committee to accept the lowest tender.
When the tender is
accepted, the facts leading to the selection of tender should be clearly recorded
in the minutes and the successful contractor should be informed and agreement
entered into stipulating the period within which the work should be completed and
also inserting penalty clauses for failure of observance o± any of the provisions
of the contract.
It is strongly advocated that when tenders are cohaidered, the
participants of their representatives be invited to witness the proceedings.
A
copy of the agreement entered into with the contractor should be made available
for the information of the participants if they so desire at the office of the
society during normal office hours.
Before entering into contract with the
successful contractor, it is strongly advised that a reference be obtained from
the contractor's banker as to his financial position and also obtain a guarantee
that work would be completed as tendered either from the contractor's banker or
from an insurance company.
The deposits of the unsuccessful tenderers should be
refunded without any delay.
When construction work commences, the architect should be instructed
to supervise the work.
The Management Committee should ensure that this is done
If the scheme is large, the
and they should also take turns to visit the site.
- 39 Alteration or change
society should consider the employment of a clerk of work.
in the plans while work is in progress should be limited and it should be a matter
Cost of such changes
between the participant concerned and the contractor.
Frequent changes should not be
should be borne immediately by the participant.
they will hold up or delay the oompletion of the scheme and also give
allowed;
rise to problems.
The society should plan the flow of funds in such a way that no delay
Delay in payment will slow down
takes place in the payments to the contractor.
It should be ascertained that
the work and affect the morale of the contractor.
In other
work for which payment is requested has, in reality, been completed.
words, care should be taken that no overpayment is made.
When the houses and all development work in the housing estate, such
as roads, mains, culverts, bridges, etc. are completed to the satisfaction of the
authorities and in accordance with the specifications, then the contractor should
be requested to obtain the certificate of fitness of occupation from the authoriOn receipt of
The society's architect should also help in this matter.
ties.
the certificate, the homes should be handed over to participants with clear
instructions that they should report within six months of occupation of the homes
any defects in the construction so that the society can get the matter rectified
For this purpose
within the stipulated period at the expense of the contract.
the society is entitled to withhold a sum not exceeding 10 per cent of the conUnder no circumstances should
tract price for a period of normally six months.
the houses be occupied by the participants before obtaining certificates of fitOccupying homes without the certificates is an offence
ness from the authorities.
As soon as the scheme is
and the occupants are liable to be prosecuted for this.
successfully implemented, the society should take immediate initiative to hand
over the roads and objects of public utilities to the authorities concerned for
future maintenance.
Before members occupy the homes, they should be requested to sign the
Memorandum of Lease or such similar agreement whereby they agree to repay the loan
together with the interest due thereon over a period of ten to fifteen years, as
the case may be, failing which the property will be repossessed and passed on to
They must agree to maintain the homes in good order and to insure
other members.
the properties against damage by fire, flood and other types of risks including
The society will take steps to obtain the insurance
civil commotion and riots.
cover during the period of the loan and the recovery of the cost from the partiLikewise, the society will carry out repairs, if required, during the
cipants.
period of the loan and recover the amount due from them.
Establish a committee amongst the members in the housing estate to look
after matters concerning their welfare, recreation, health and sanitation,
security, etc. and generally to take up matters of common interest with the
Management Committee.
The society should commence to recover the dues from the participants
promptly and when the amount of the loan is fully settled together with interest
and other dues, then the society should immediately take steps to transfer the
property to the participants, subject to the minimum period of ownership by the
society as provided for in the by-laws.
- 40 -
Annex B
Laws of the
Housing Society Limited
Nam
Constitution and Address
The Society shall be called the
1.
Co-operative Housing Society Limited.
Its registered address shall be at
In the event of any
change in the address of the Society, notice thereof shall be sent to the
Registrar of Co-operative Societies.
Interpretation
In the construction of these by-laws the following words and expressions
2.
shall have respectively the following meanings unless the subject matter or context is inconsistent therewith:
"Society" means the
Housing Society Limited;
Co-operative
"Ordinance" means the Co-operative Societies' Ordinance
and amendments thereto;
"rules" means the rules for the time being made under the Ordinance;
"Registrar" means the person appointed under section 3 of the Ordinance to
perform the duties of Registrar of Co-operative Societies
"Committee" means the Committee of Management of the Society;
"building" includes houses and flats;
"flats" means buildings comprising several apartments;
"apartment" means two or more rooms in flats set apart as a home;
words importing the singular or plural number respectively shall include the
singular and. plural numbers and words quoting the masculine gender should
include the feminine gender.
Area of Operation
3.
The area of operation of the Society shall be
Objects
4.
(a)
(1)
The objects of the Society shall be:
to build or cause to be built residential houses/flats for members on land purchased by the Society for and on behalf of the
members or any group of them and to recover the cost of such
buildings and the land in instalments within a period not
exceeding twenty years;
on land belonging to the Society and to sell such buildings to
members or to rent or lease such buildings to members on terms
and conditions prescribed under these by-laws;
- 41 -
(iii)
on land owned by members and to recover the cost of such buildings
in instalments within a period not exceeding twenty years.
to purchase fully erected building8 with land from overnment or Rousing
and Development Board or any house construction agency, and to sell,
lease or rent them to members on terms and conditions presoribed under
these bylaws;
to purchase land, subdivide it and sell lots to members on suoh terms
and conditions as may be prescribed in these bylaws;
to promote thrift, cooperation, selfhelp and mutual aid.
(2)
In pursuance of the above objects, the Society may:
acquire land by purchase, mortgage, lease or otherwise in
lay out land to suit the requirements of the members in the shape
of roads, parks, playgrounds, schools, hospitals, markets, post
offices, cinemas and other social amenitiec;
lay out land as housing sites for the benefit of the members;
construct or cause to be constructed buildings and other works of
common utility for the benefit of the members;
raise funds required for the business of the Society;
repair, alter or otherwise deal with the buildings of the Society;
establish and. maintain social, recreative, educational, public
health or medical institutions for the benefit of the members;
own solely or jointly, mortage, lease, rent or otherwise dispose
of land, housing sites, buildings and all other property movable
or immovable as may be necessary for the attainment of the objects
of the Society;
do all things necessary and expedient for the accomplishment of
the aforesaid objects and for the comfort, convenience and benefit
of the members.
Membership
5.
(a)
Membership of the Society shall consist of all those persons who
signed the application for registration of the Society and persons
who may from time to time be admitted as members in accordance with
these bylaws;
all members shall be at least 18 years of age, of good character and
sound mind, who are
no person who is already a member of a cooperative housing society
Nor shall a member
shall be admitted as a member of the Society.
of the Society join any other cooperative housing society while
being a member of the Society;
subject to the provision hereinafter contained, no person who already
owns a house/apartment shall be admitted as a member; if already a
This
member he shall be compelled to withdraw from the Society;
bylaw does not, however, apply to members who have been allotted
houses/apartments by the Society;
provided that the Registrar may, on the application of the aommit-tee,
allow, under such terms and conditions as he may prescribe, any
person who already owns a house/apartment to be considered for
membership and to retain such membership if he is satisfied that the
services of such person shall be of direct interest to the Society.
- 42 -
Selection of Members
6.
(a)
Every person qualified for membership under By-law 5(b) who is
desirous of becoming a member shall send in an application to
the secretary in the form prescribed by the Committee, stating
his willingness to submit to the obligations resulting from the
constitution and to abide by the by-laws and decisions of the
Society.
The applicant shall be proposed by one member and
seconded by another;
every such application for membership shall be dealt with by the
Committee who shall have the power to grant the application or
to refuse it without assigning reasons;
the election of a member shall be notified to such member without
delay.
Every member on election shall pay an entrance fee of $5;
every applicant who has been duly elected shall, on payment of
the entrance fee and the value of one share, be deemed to have
acquired all the rights, duties and liabilities of a member of the
Society as laid down in these by-laws.
Cessation Membership
7.
Membership ceases by:
resignation after giving to the Society one year's notice in
writing but the Committee may, under exceptional circumstances,
allow a member to resign by giving shorter notice;
failure to pay his shares for three months without the prior
sanction of the Committee;
expulsion incordance with By-law 8;
death, insolvency or insanity;
conviction of an offence punishable by iinprisonnient.
Expulsion and Suspension
8.
(a)
If any member violates the by-laws or otherwise acts in a maimer
prejudicial to the interest of the Society or has been guilty of
conduct constituting a nuisance or persistent annoyance to
persons in the neighbourhood or permitting the use of the premises
for illegal or immoral purposes or has caused substantial damage
to the premises, the Committee may suspend him and make a report
thereon to the general meeting which shall have the power to
terminate his membership by a resolution of two-thirds of the
members present voting in favour of his expulsion;
a suspended member shall not be entitled to any of the rights of
membership during the period of suspension but he may be allowed
to remain in his house/apartment, if he has been allotted and is
in occupation of such a house/apartment, until his expulsion is
confirmed by the general meeting.
He shall have the right to be
heard in respect of his expulsion when the matter is brought up
at the general meeting;
if the expulsion is confirmed by the general meeting he shall be
required to vacate his house/apartment within one month from the
date of the general meeting confirming his expulsion;
Cd)
an expelled member shall be refunded the value, as assessed by the
Committee, of the shares owned by him and the value of the land,
house/apartment allotted to him provided thet such refpnd shall
not be in excess of what the member actually paid for the shares
or the land, house/apartment.
- 43 -
Settlement on Cessation of Membership
On cessation of membership under By-law 7 the value of the shares paid by
9..
the member as ascertained by the last audited accounts, shall be refunded, after
deduction of any sums due by him to the Society, to him, his nominee, heir or
legal representative as the case may be, as soon as possible without profits or
after the next division of profits with the dividend found due thereon, provided
that in the case of cessation by insanity, the property of such member shall be
dealt with in accordance with Rule 19 of the rules.
Nominees
Any member may on admission nominate one or more persons to whom sums due
10.
to the mem.ber by the Society of any change in the name(s) or address(es) of his
nominee(s).
Liability of Members
11.
(a)
The liability of a member of the society shall be limited to the
shares subscribed by him;
the liability of a past member for the debts of the Society as they
existed at the time when he ceased to be a member shall continue
for a period of two years from the date of oeaeing to be a member;
the estate of a deceased member shall be liable for a period of two
years from the time of his decease for the debts of the Society as
they existed at the time of his decease.
Funds
12.
The funds of the Society shall consist of:
shares;
deposits and loans;
staff deposits and security funds;
realised profits;
reserve fund;
entrance fees;
donations;
contribution towards maintenance of roads, water supply, lighting
and sanitation in. the housing estates established by the Society;
subscriptions towards social, medical, recreative and educational
institutions in the housing estates established by the Society;
rents and other receipts;
other funds approved by the Registrar.
a
Shares
13.
(a)
The shares shall be $10.00 each;
- 44 -
(b)
(i)
every member shall hold at least 50 shares and may acquire
additional shares, if he so desires.
Shares may be acquired
either by payment in ±u11 or by monthly instalments of $10.00
or its multiples;
when a member fails to pay his share instalments for three months
without the prior sanction of the Committee he shall be deemed to
have ceased to be a member.
Shares paid by him shall not be
refunded until expiration of one year from the date of cessation
of memberheip;
the Society may adjust once only 80 per cent of the member's share
capital towards the initial payment required under By-law 29(c)
for the aoq,uisition. of a house/apartment.
Deposits
14.
The Society may receive deposits from members and non-members on such
terms and conditions as the Registrar may impose.
Borrowings
Subject to such limit as the Registrar may impose from time to time on
15.
its maximum borrowing powers and the. maximum rate of interest to be paid on its
borrowings, the Society may borrow funda to be used in its business from members
and/or non-members..
Subject to the limit imposed by the Registrar, the Society
shall determine annually at a general. meeting the maximum limit of indebtedness
in respect of existing and new borrowings which may be incurred in the coming
year;
such limit may be modified at a subsequent general meeting.
Distribution of Profits
16.
(a)
Out "of the annual net profits of the Societyat least 25 per cent or
such lesser amount as may be approved, under section 34(1(a) of the
Ordinance shall be credited to the reserve fund. Prom the
remaining net profits the general meeting shall have power to
approve any or all of the following payments:
a dividend not exceeding the amoun.t provided in the co-operative
societies' rules or fully paid on the last day of the year
for which the profits have accrued;
honoraria to the honorary workers of the Society;
(ifl,)
a contributionnot exceeding 10 per cent of the net profits toa
common good fund.
A common good fund is one the use of
which shall be confined to the benefit of the members of
the Society and may with the approval of the Registrar be
devoted for the purpose of relief of the poor, education or
any other object of general meeting;
the society may also, out of the pr9±'its, make allocations to any
funds created by the Society and approved by the Registrar. Any
profits not actually disposed of in. the above manner shall be
carried forward to the following year;
no profits shall be distributed until the accounts are audited by
an auditor approved by the Registrar;
Reserve Pund
The reserve fund is indivisible and no member is entitled 'to claim a
17.
special share in it.
Until the Registrar directs that ±t be invested otherwise,
it may be utilised in. the business 01' the Society.
- 45 -
General Meeting
18.
(a)
(i)
The supreme authority of the Society shall be vested in the
General meetings shall be of
general meeting of members.
Ordinary general
two kinds, ordinary and extraordinary.
meetings shall be held once in every year not later than
six months after the close of the financial year;
(ii)
at least 15 days' notice shall be given to all members for
any general meeting. Such notice shall clearly state the
date, time and place of the meeting and the business to be
transacted at such meeting.. No business other than. that
specified in. the notice or included. in accordance with. By-law
18(e)(9) shall be discussed or transacted at a general meeting
without the specific approval of the chairman of the meeting;
the Committee may, whenever i.t. thinks fit, and shall upon a
requisitionmad.e.in writing, by at least one-fourth of the members
or by twenty members, whichever is less, or by the Registrar,
convene an extrrdinary general meeting;
one.fourth of the total number of members of the. Society or fifty,
whichever is less, shall form. a ,uorum at a general meeting. All
q.uestions other than amended to by-laws shall be decided by a
majority of votes of those present. The chairman shall have no
When the votes are equal the motion shall be deemed
casting vote.
lost;
(ci)
(e)
the president shall preside at all general meetings. In his
In their
absence, one of the vice-presidents shall preside.
absence any member elected, by the meeting shall preside;
The following business shall be transacted at the general meeting:
the election or removal of the. members of the Committee;
the c.onsiderat.ion of the annual statement of accounts and
balance sheets, of the auditors' reports and inspection notes
of the Registrar;
the disposal of profits in accordance with the Ordinance,
rules and these by-laws;
consideration of reports of the Committee;
the fixing, subject to the approval of the Registrar, of
the maximum liability to be incurred during the following
year in loans and deposits from non-members;
the amendment of these by-laws with the previous sanction of
the Registrar;
to elect two internal auditors and to appoint an external
auditor to audit the accounts of the Society for the year;
to approve estimates of income and expenditure;
to transact any other business of the Society of which at
least 7 days' notice shall have been given;
each member shall have one vote irrespective of the number of
No member who is in arrears
shares held by him in the Society.
of instalments of his dues for more than three months shall be
entitled to vote at the meetings of the Society;
all business discussed or decided at a geiera1 meeting shall be
recorded in a minute book which shall be signed by the secretary
of that meeting and the chairman of the meeting at which the
minutes are confirmed.
- 46 -
Committee of Management
19.
(a)
The Committee of Management shall consist of 15 members of the
society elected at the general meeting of the Society. No paid
official of the Society shall become a member of the Committee;
(b)
members of the Committee shall retire in rotation, one-third of
the members retiring at each annual general meeting. Por the
first two years, retiring members shall be decided by drawing of
lots.
Retiring members may be re-elected;
(0)
vacancies on the Committee shall be filled by co-option until the
next general meeting in accordance with By-law 21(a)(9).;
(ci)
every member of the Committee shall have one vote at any committee
m.e.eting;
(e)
the Committee shall elect from among. themselves a chairman, an
honorary secretary and honorary treasurer or may at its discretion
appoint a paid officer or officers under By-law 2l(a)(l4) to carry
out the duties of secretary and/or treasurer;
(f)
the Qommittee shall meet at least once a month or more often if
necessary.
The meeting of the Committee shall be called by the
s.ecretary
A Committee meeting shall also be called if three
members of the Committee make a request in writing to the secretary
mentioning the business to be transacted;
(g)
no member of the Committee shall be present or vote in any
Committee meeting on any matter in which he. Ias a personal interest
(b)
seven members of the Committee shall form a quorum;
the chairman shall preside at all the Committee meetings of the
Society.
In. the absence of the chairman, any member of the
Committee chosen by those present shall preside at all meetings;
all business discussed or decided at a meeting of the Committee
shall be recorded in a minute book which shall be signed by the
secretary of that meeting and the chairman of the meeting at which
the minutes are confirmed;
a member of the Committee shall automatically cease to hold office
if he:
ceases to be a member of the Society;
accepts any employment in. the Society;
is removed from office at the general meeting;
absents himself from three consecutive meetings without the
approval of the Committee.
Powers and Duties of the Committee
20.
(a)
The Ccmmittee shall exercise all the powers of the Society except
those reserved for the general meeting, subject to any regulations
and restrictions duly laid down by a general meeting or the bylaws, and in particular shall have the following powers and duties:
to observe in all their transactions, the Ordinance, rules
and these by-laws;
to maintaiti accurate accounts of all money received and
expended and all stock bought and sold;
to keep on account of the assets an.d liabilities of the
Society;
-
47 -
-to keep correot and up to date a register of members;
to prepare anil lay before the annual general meeting a
profit and loss account and an audited balance sheet;
to examine the accounts, sanction contingent expenditure and
supervise the maintenance of the prescribed books, registers
and other documents;
to consider the inspection notes of the Registrar and other
officers of the Registrar's department and to take necessary
action thereon.;
to elect new members, to allot shares and to give effect to
transfer of shar.es
to c.o-opt members to fill vacancies arising from time to time
among the members of the Committee provided the names of the
members of the Committee so co-opted shall be submitted to
after
the next general meeting held thereafter for approval;
such approval a co-opted member shall hold office for the
unexpired portion of the period of service of his predecessor
in office;
to summon general meetings in accordance with these by-laws;
to contract loans subject to the approval of the general
meeting and the Registrar and to mortgage the property of the
Society for suc1 loans;
up buildings and arrange for amenities.;
(a)
to pu
(b)
to purchase, transfer, let, lease and sell lands and
buildings in. accordance with these by-laws;
to receive deposits from members and non-members in accordance
with By-law 14;
to appoint, suspend or dismiss any salaried or non-salaried
officer or employee and to assign to taem the respective
duties, to fix their scale of salaries and to obtain security
from them.;
to supervise the work of the employees of the Society, give
directions to them and to take such disciplinary action
against them as may be deemed necessary;
through any member or officer of the Society, or any other
person specially authorised, to institute, conduct, defend,
compromise, ref.er to arbitration or abandon legal proceedings
by or against the Society or Committee or the officers
concerning the affairs of the Society;
to acquire on behalf of the Society shares in or to pay
subscriptions to other cc-operative societies and to nominate
members to represent the Society at the meetings of such
societies.;
to enter into contract on behalf of the Society; such
contracts shall bear, on. behalf of the Society, signatures of
Any contract
the chairman and the secretary of the Society.
so signed. and/or executed shall, notwithstanding that if it
be afterwards discovered that there was some defect in the
appointment of any such chairman or secretary or that they or
any one of them were disqualified, be as valid and binding
on the ooiety and the members thereof as if every such person
had been duly appointed and was duly qualified;
to arrange for the custody of books and other documents;
- 48 -
to draw up regulations with the approval of' the Registrar
for the conduct of' the business of the Society;
generally to carry on the business of the Society in accordance with these by-laws.
(b)
The Committee shall exercise the diligence and prudence of ordinary
men of business and shall be responsible in all their acts and
omissions to the general meeting of members and shall further be
responsible for any loss sustained through negligence or acts or
omissions contrary to the Co-operative Societies' Ordinance, the
rules and the by-laws.
Secretary
21.
The powers and duties of the secretary shall be -
(i)
to maintain correctly and up to date the prescribed books, registers
and other documents;
to sign on behalf of the Society and conduct its correspondence;
to summon and attend general meetings and meetings of the Committee
under the by-laws of the Society;
to record the proceedings of such meetings and have them duly signed;
to prepare the annual statements and annual report and submit them to
the (Jonimittee;
to certify together with the chairman copies of entries in books as
provided for under the Ordinance;
to hold the seal of the Society in safe custody;
to attend to such other duties as the Committee may assign to him;
provided that the Committee reserves the right to transfer any of the duties
specified hereinbefore to any paid official of the Society.
Treasurer
22.
The powers and duties of the treasurer shall be to take charge of all monies received by the Society;
to make disbursements in accordance with the directi,ons of the
Committee;
to maintain the cash book which he shall sign at least once a month in
token of its accuracy;
to majntain such other books of accounts;
to produce the cash balance whenever called upon to do so by the
chairman, the auditors or an officer appointed by the Registrar;
to arrange for the deposit of all monies received by the Society in a
bank approved by the Registrar within such time as may be decided upon
by the Committee, provided that he may keep a sum not exceeding $100
at any time as petty cash;
to be responsible for the preparation of all receipts and vouchers and
other financial documents prescribed by the by-laws or required by the
Society in the course of its business;
rn
- 49 (s)
to do such other acts as may be required under the by-laws or on the
directions of the Committee, provided that -the Committee may transfer
any of the powers and duties hereinbefore specified to any paid official
of the Society.
Books and Registers to be Maintained
23
(a)
The following books and registers shall be maintained:
a register of members
tion of every member,
date of his admission
of membership and the
showing the name, address and occupathe number of shares held by him, the
to membership, the date of teimination
nominee appointed under By-law 10;
a cash book showing the receipts, payments and balance of
each day on which business is done;
()
ledgers;
a minute book or books;
a register of shares, stock register and such other books
and documents as may be required. by the Registrar;
(b)
The Society shall keep a copy of the Ordinance and the rules and
of its by-laws and a list of its members open to inspection free
of charge at all reasonable times at the registered address of
Any member may, with the sanction of the Committee,
the Society.
inspect such accounts of -the Society as shall relate to his
shares, subscriptions, deposits and other transactions with the
Society.
Inve etment
24.
(a)
The funds of the Society may be devoted to the promotion of the
stated objects of the Society;
money received as security from employees shall be separately
deposited in a bank and all interest derived therefrom shall be
paid to the respective employee;
after payment of the preliminary expenses incurred in constituting
the Society, all entrance fees shall be credited to a special fund
which may be used for printing of by-laws and/or the purchase and
printing of books and documents set out in By-law 24 but shall
not be used for annually recurrent expenditure on printing.
Purchase of Land and Building
25.
The Committee shall have the power to acquire land and buildings;
to acquire land and to construct buildings thereon;
to lay streets, roads and to provide and maintain facilities for
water supply, drainage, lighting and similar wark of common
utility.
Allotment of Houses/Apartments
No member
Allotment of houses/apartments shall bd decided by lots.
26.
With the approval of the
shall be allotted more than one house/apartment.
Committee, members may be allowed to exchange house/apartment by mutual consent
before occupation.
Construction of Houses/Flats
27.
Houses/flats shall be constructed according to types and designs
prepared by a registered architect approved by the Committee.
They may be
constructed by any housing and development board or by any house construction
agency or qualified contractors.
Acquisition of Houses/Apartments
28.
(a)
A member shall on admission to the Society or when called upon
to do so, specify the type of house/apartment he proposes to
acquire from the Society.
Before the Society undertakes to build
or purchase the house/apartment he shall execute an agreement
indemnifying the Society to the extent of the loss that may be
sustained on account of the member failing to keep to the
contract;
(b)
a member shall be required to pay the cost of the land to be
allotted to him.
Development charges and other expenses incurred
in rendering the sites suitable for building shall be paid by the
member.
In respect of land on which flats are erected, the cost
of land and development charges shall be added to the cost of the
apartments and shall be recovered from members to whom they are
allotted in accordance with By-law 28(c);
(C)
a member shall be required to pay to the Society in cash or by
way of adjustment of share capital under By-law l3(b)(iii) an
amount equivalent to at least one-tenth of the total cost of the
house/apartment he intends to erect or acquire or such amount as
decided by the Committee.
The Society shall then advance the
difference between the total cost of the house/apartment" and the
sum paid by him in cash or by adjustment of share capital.
The
member shall repay the loan in monthly instalments (first instalment commencing within one month from the date of completion or
acquisition of the house/apartment) within such period not exceeding twenty years as may be decided by the Qonmittee.
The instalment payable shall include a rate of interest not exceeding
1 per cent above the rate at which the Society borrows funds.
Interest shall begin to accrue on all sums advanced for the construction or acquisition of the house/apartment from the date of
the first advance and shall continue until the loan is settled in
full;
a member may be required to pay legal fees, if any, incurred in
respect of purchase of land, houses and flats by the Society and
in respect of transfer of land, houses/apartments to members;
every member shall be required to execute a Memorandum of Lease as
approved by the Committee and/or any other agreement before he
enters into occupation of his house/apartment.
A member may pay
his dues in full or by instalments at any time before the date
fixed for the final payment, provided that in the case of a house,
it shall remain the property of the Societyfor a minimum period
of six years from the date of occupation.
In the case of apartments, the member shall enjoy right of occupation under the
Memorandum of Lease;
-
no member can have more than one house/apartment in the Society;
if a member who has acquired a house/apartment in the Society
fails to keep to the terms of the Memorandum of Lease or agreement
or defaults in the payment of instalments, rents, rates, common
administrative charges, insurance premiums and any other sums due
to the Society, he shall be evicted from the house/apartment.
The house/apartment shall be dealt with in accordance with
By-law 3(c);
- 51 -
(h)
no member shall assign, sub-let or part with the possession of the
house/apartment or any part thereof without the previous
Transfer of houses/apartments shall
permission of the Oonimittee.
An assignment or
be effected only to members of the Society.
transfer of right in contravention of these by-laws shall be of no
force or effect and shall not be binding on the Society.
Erection of Houses on Members' Own Land
Members desiring to have houses built on their own land by the Society
may apply in writing to the Committee on the prescribed form obtainable from the
On the Committee's approval of the application, the member shall
secretary.
transfer to the Society, subject to the conditions regarding retransfer hereinafter contained in By-law 31(b), the land on which the building is to be erected
by the Society until he completely liquidates the debt due to the Society and
shall be bound by all the regulations contained in the said application and these
by-laws.
Liquidation of the Cost and Transfer of
Bui ldig
(a)
All stuns due to the Society in respect of any month shall be made
by the first week of the following month;
when a member has settled in full the cost of the building and
interest, the Society shall execute a transfer of the property in
his favour subject to By-law 28(e);
when a member has settled in full the cost of the apartment he
shall be entitled to the right to occupy the apartment under the
terms and conditions of the Memoranthun of Lease and shall be
obliged to pay the charges specified in By-law 31(c).
Repairs, Maintenance of Buildings and
Amenities
The expensof maintenance, upkeep and current repairs ci' houses
during the period of loan shall be met by the Society and debited
to the member and shall be recovered in monthly instalments as
decided by the Committee;
where a group of houses has certain amenities, e.g. water service,
drainage and roads, the cost of maintenance and repairs shall be
equally shared as decided by the Committee;
in respect of flats where the Society maintains such common
services as the operation of lifts, lighting of staircases and
corridors, sanitary and health services, removal and disposal of
garbage, replacements and repairs or parts in common use by
members, the member shall contribute monthly at least $10 or such
amount as may be decided by the Committee towards the cost of such
charges;
all dues including property tax payable to Government and/or local
authorities shall be paid direct by each member in respect of the
The Committee may undertake to pay
house/apartment he occupies.
any of these dues and recover the money from the members;
all buildings belonging to the Society shall be fully covered by
The insurance premiums shall be recovered proporinsurance.
tionately from the members;
when the Committee arranges for the provision of social, medical,
recreational and educational amenities for the members, a levy may
be charged at such rates as approved by the general meeting.
- 52 Default in Payment of Dues
32.
(a)
When a member occupies a house/apartment allotted by the Society
and does not pay his dues for two consecutive months, he shall be
If he does not
requested to pay such dues within thirty days.
make the payment the Committee shall take possession of the house/
apa:rtment;
such a defaulter may, at the discretion of the Committee, be reinstated in the house/apartment if he pays up all dues within
thirty days after the Society has taken possession of his house/
apartment;
the house/apartment which becomes vacant by such default may be
sold by the Committee to other members.
The defaulter shall be
entitled to a refund of the excess amount over his dues that may
be realised by such sale.
All expenses in connection with the
sale of the defaulter's house/apartment shall be deducted from the
amount realised by the sale of the house/apartment.
The decision
of the Committee shall be final and binding.
All cases of such
defaulters shall be put up before the next general meeting for
expulsion of membership in accordance with By-law 8(a).
Disputes
33. All disputes touching the business of the Society shall be referred to
the Registrar in the manner provided for in the Co-operative Societies! Ordinance.
Dissolution
34. The Society shall not be dissolved except in accordance with the provisions of the Co-operative Societies! Ordinance.
General
35.
(a)
The financial year of the Society shall begin on 1 January and end
Per closing of accounts, stocks in hand shall
as of 31 December.
be valued at cost price or current purchasable price, whichever is
less;
the Society shall not write off any debt exceeding $100 or any
part of such debt without the prier sanction of the Registrar;
the accounts of the Society shall be audited annually by an auditor
appointed by the general meeting and approved by the Registrar.
The auditor shall be entitled to call for and examine any paper or
document belonging to the Society and shall make a special report
to the Society upon any matter connected with the accounts which
appears to him to require notice;
(ci)
the seal of the Society shall not be fixed to any instrument except
by the authority of a resolution of the Committee and in the
The chairman and
presence of the chairman and of the secretary.
the secretary shall sign every instrument to which the seal of the
Society is affixed in their presence;
(e)
these by-laws are supplementary to the provisions of the Cooperative Societies! Ordinance and the rules and the Society shall
be governed by the said Ordinance, the rules and the by-laws read
No addition or alteration in or amendment of the bytogether.
laws shall be made yithout the previous sanction of the Registrar.
Nothing in these by-laws shall have any power to limit the authority
of the Registrar as provided for in the Co-operative Societies!
Ordinance and the rules.
- 53 -
Additional Provisions Suggested
In the light of experience gained in the operation and management of housing
co-operatives and. in order to eliminate the possible sources of friction between
members and management committees and also to safeguard both the interest of the
members and the housing co-operatives, the following proposals are recommended to
be embodied in the existing by-laws:
a valuation report from qualified and. licensed appraiser in respect of the
land to be purchased should be obtained except in the case of land acquired
from state governments;
the authorities concerned, namely the Water Department, National Electricity
Board, Town Planning Department and other relevant departments should be
consulted in writing with regard to the suitability of the land for the
development of housing before actual purchase is undertaken;
the payment required for land and. the initial down-payment should be amalgaThe members should be required to pay initially a certain percentage
mated.
of the value of the property (land and the value of the house to be conThis is how private developers inOluding the
structed taken together).
Malaya Borneo Building Society operate;
where societies are unable to construct homes for a period of five years
from the date of purchase of land, then the lots should be transferred to the
participants, provided the cost of lots and cost of development have been
paid in full;
the provision in the housing by-laws which stipulate that the ownership of
the properties developed should remain in the name of the societies for a
minimum period of six years (in one or two cases, three years) should be
The conditions which warranted the imposition of such a
reirioved.
restriction no longer exist;
This
the by-laws should not stipulate the rate of interest to be charged.
The existing by-laws
matter should be left to the management committees.
(in most cases) limit interest rate to 1 per cent above the rate the
It may be argued
societies borrow for the development of housing schemes.
that if the restriction is removed, committees may be tempted to raise
After all, the
This argument does not appear to be sound.
interest rate.
members have a right to decide whether or not to participate in a housing
If the interest rate is high, members can well decline to partischeme.
If efficient management is desired, members must be prepared to
cipate.
meet the cost;
loan and lease agreements should take effect from the date of commencement of
This is to ensure that interest will begin to accrue
construction of homes.
The existing by-laws
from the day funds are released for construction work.
are not clear over this matter;
completed homes should be taken over by the participants from the societies
not later than a week after the issue of certificate of fitness by the
Any loss of fittings or damage to the properties arising out
authorities.
of failure of the participants to take over should be their responsibility;
if, after receiving the down-payments, there should
commencement of construction work for more than six
should be held liable to pay interest on the amount
payable by commercial banks on deposits at the time
be a delay in the
months, then the societies
at an interest rate
when the down-payments
were made;
if no development of housing takes place for more than a year from the date
of down-payments, then the societies should refund the amount received
together with interest as indicated in (i) above;
- 54 -
(Ic)
members wishing to resign should 1e refunded the value o±' the shares as
disclosed in the last balance sheet but in no case more than what they have
paid to acquire the shares.
If the accounts have not been audited and no
balance sheet is available, then the societies should be held responsible
for the refund of the shares in full.
- 55 -
Consumers' and Production Co-operatives in
Developing Countries with Special Reference
to Joint Trade Union - Co-operative Action
by
Y. LEVI
Afro-Asian Institute for Co-operative
and Labour studies - Israel
(Outlines of Lectures)
Introductory Note
Trade unions and co-operatives in developed and developing countries:
membership, scope of activities, role within national economies, degree of
A comparison in terms of existing
development in the urban and rural areas.
General considerations on trade unions facilities and development needs.
Distinctive features of the trade union and the
co-operatives relationships.
Forms of collaboration
co-operative movement and common fields o± interest.
Introducing the notion of non-bargaining activities
between the two movements.
of trade unions with special reference to co-operative initiatives.
Reasons and scope for this type of activities in developing countries
with particular reference to the consumers' and production fields.
Consumers
Co-operatives
General Considerations
Consumers' co-operatives in the co-operative doctrine and history.
The Rochdale experience as the first successful
Attempts prior to Rochdalè.
The
atteapt at co-operative organisation of wage earners as consumers.
co-operative principles as means for the smooth functioning of a consumers'
A review of the consumers' co-operative sector in past-Rochdale times.
society.
The
Present trends in consumers' co-operation in the developed economies.
extension of activities beyond the domain of comsumption (as, e.g. in housing,
production, tourism, etc.).
Its aims and scope of
Characteristics of the consumer co-operative.
The co-operative as an
The co-operative as a social unit.
activities.
The interdependence of
The member as owner and user.
economic enterprise.
The consumers'
co-oerative principles in the functioning of the society.
co-operatives in relationship to other co-operative branches.
The wage earner as
Trade unions and the protection of the consumer.
the trade union and the
Protecting the consumer:
consumer and producer.
The trade union and the co-operative movements in their
co-operative approach.
Urban areas
relationships in the consumers' branch in industrialised countries.
as the main focus of these relationships.
Consumers' Co-operatives in. Developing Countries
Malor obstacles confronting the establishment of consumers' co-operatives.
Limited buying power.
The predominantly rural character of population.
Geographical distances between supply centres and localities in the rural areas.
Low level
Shortage of qualified personnel.
Inadequate transport facilities.
Strength of middle-men, private dealers and big wholesale
of education.
commercial companies, etc.
- 56 -
Possible aims to be fulfilled by consumers' co-operatives.
Improvement of the
Improvement and diversification of consumption habits.'
purchasing power and contribution to savings and capital formation especially
Protection of the
in the rural areas and amongst low-income urban groups.
consumer against excessive prices, adulteration of goods, misleading advertising,
poor weight and unhygienic practices, sumptuous expenditure, improvident
Education to self-help and democratic
expenditure encouraged by credit selling,
Promotion of new social bonds and attitudes to joint action.
practices.
Dissemination of modern commercial and administrative know-how and education to
Contribution to community life in spheres other
direct economic responsibility.
than consumption.
'I
Some major difficulties met by
Problems of consumers' co-operatives.
small size of primary societies,
consumerst societies in developing countries:
inappropriate location, inadequate support or conversely excessive control of
governments, competition from diverse factors, insufficient assortment of
commodities, shortage of capital, lack of members' loyalty, of qualified
personnel and management, lack of honesty in business operations, excess of
(a) prior to
Requirements of consumars' co-operatives:
credit sales, etc.
a survey of existing conditions enabling to decide on the
establishment:
location and size of the society (with regard to needs to stand competition and
to the possibilities to expand) and on its prospects in terms of membership,
The setting up of approprhte by-laws and
trading, financing, management, etc.
The importance of education and of the
the registration of the society.
a
assistance of outside organiations.; (b) following the establishment:
management capable of combining the social and economic needs of the society,
a supply system enabling societies to avoid excessive profits of big privaie
wholesale agents, adequate external assistance with regard to financing,
Co-operative principles and their
supervising, guidance, education, etc.
Basic norms of
relevance to consumers' co-operatives in developing countries.
management and administration.
Trade unions and consumers' co-operatives.
Possibilities of joint
action of trade unions and co-operatives: through agreements with co-operatives
with regard to conditions of work and wages of employed workers in consumers'
societies, through the promotion of unionisation of wage earners in consumers'
co-operatives, through joint programmes of education and information on
co-operative action and through the establishment of co-operatives by trade
Scope and urgency for unions in developing countries to establiah
unions.
consumers' co-operatives.
Advantages accruing to unions therefrom.
Possibilities of action in the urban and the rural areas according to different
categories of working groups (such as: wage earners, self-employed craftsmen or
people without regular employment in the urban areas, plantations workers, other
wage earners and farmers in the rural areas).
Various factors conditioning the
viability of union co-operatives as e.g. the appropriate location (in terms of
social and economic conditions), the need to adapt the economic initiative to the
actual means of the union, to have co-operative societies duly registered and to
have the management and finances of the societies separated from those of the
unions.
The double aspect of complementarity of union-created co-operatives:
with regard to the activities of the co-operative movement and to the classic
claiming function of trade unions.
Possible ways of functioning of consumer
co-operatives at the plant level with particular reference to loan of savings
operations.
Practical examples of trade unions' initiatives in the promotion of
consumers' co-operatives.
(a) The integration of economic activities of unions
within bargaining negotiations: the case of the Venezuelan Sugar Workers' and of
(b) the creation of independent economic
t1e Railway Workers' Union in Indonesia;
activities as a means to avoid indebtedness and exploitation: the case of the
amalgamated credit and consumer functions in "The Bombay Dock Workers'
(c) co-operative activities of unions within the
Co-operative Credit Society";
framework of peaceful relations with the employers: the consumer, loan and credit
and housing initiatives of the Textile Labour Associafion (TLA) of Abmedabad, India.
4
- 57 Production Oo-operatives
Philippe Buchez and the first production
Historical background.
The role of production in the Statutes of the Rochdale Pioneers.
co-operatives.
The establishment of production units by consumerst co-operatives as one o± the
factors that led to the separate development of trade unions and co-operatives.
Development trends in production co-operatives in Western countries and patterns
of relationship between tl:e trade union and the co-operative movement.
A common classification:
Types of production co-operatives.
societies of producers, mainly artisans, associated for common purchase of raw
labour
material and sales of products and working on an individual basis;
contracting co-operatives; societies of producers working under a system of
In some instances workers' production societies include also
self-government.
services (such as transport in Israel or professionals as in some Western
The two first types may be regarded as a sort of "pre-co-operative"
countries).
The main distinctive feature of a workers' production
forms of organisaton.
the integration of the functions of capital, labour and management.
society:
The member of a production co-operative as co-worker, co-partner and co-director.
Difference between production units and other forms of co-operation of more
loose character in terms of the commitment of members to the society, as e.g.
Additional functions of production
consumers' and credit societies.
Types of
co-operatives (as credit, insurance and advisory services).
through
primary
or
federal
societies.
organisation:
Lack of openness to changes
l. Problems of production co-operatives.
Lack of finances
and of attitudes to joint action in the formative stages.
leading to starts in condition of undercapitalisation resulting in the necessity,
for members, to earr.. less and possibly to work harder than in alternative outlets.
The worker becomes entrepreneur but may lose the assurance of a regular wage from
Lack of managerial skill and possible conflicts between managethe employer.
Inflexibility of production co-operatives with regard to
ment and members.
Problems of
fluctuations in demand on the mar1et and to technical innovations.
competition, of marketing and advertising, of research for betterment of
Problems of hired workers and of
production and adjustments to new techniques.
their relaton.s with members.
a
Some prerequisites for the success of production co-operatives:
l'-i-.
survey of marketing possibilities, a proper selection of members, an efficient
an competent management, a clear distribution of responsibilities, a system of
remuneration of work according to skill and taking into consideration incentives
for promotion, provisions for the acceptance of hired workers as members, adequate
support of outside organisations with regard to supply, marketing, credit,
training, auditing and supervising, etc.
The co-operative principles in the functioning of production
co-operatives.
Scope for trade unions' initiatives in production co-operatives in
Possibilities in the urban and the rural areas according
developing countries.
Some advantages accruing to trade unions
9verse categories of workers.
from co-operative activities in the production and services branches: a means to
increase membership and loyalty to the union, acquisition of knowledge in methods
of production and in management of business permitting the union to strengthen its
stand vis-à-vis the employer, creation of additional employment, contribution
to nutritional problems (in the case of agricultural production units), a means
to ease shortage of housing especially in the urban areas, contribution to savings.
Trade unions and diversification of non-agricultural employment in the
Possible avenues for activities:
rural areas of developing countries.
organisation of production and service units among small artisans, landless
Some
workers and unemployed villagers, plantations workers, fishermen, etc.
considerations on the potential role of trade unionism within the framework df
Tourism as a potential domain of union-sponsored
regional development schemes.
activities with special reference to the rural areas.
- 58 -
Cases in union-sponsored production co-operatives.
Tunisia
The case of Israel: rural and urban production
co-operatives fully integrated within a multifunctional labour organisation.
18.
Madagascar, 'Venezuela.
Annexes:
(1)
A comparative chart of similarities and differences between
the trade union and the co-operative.
(2)
Organisation of a consumers
co-operative:
an outline for a survey of community on the feasibility
of consumers' co-operatives;
a questionnaire on consumption habits.
(3)
A chart showing urban and rural production co-operatives and
unionised workers in their relationship and integration within
a comprehensive labour movement:
the case of Histadrut, Israel.
- 59 -
(1)
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- 60 -
(2)
Organisation of a Consumers' Co-operative
An Outline for a Survey of Community
on the Feasibility of Consumers
A.
Co-operatives *
I.
Community Characteristics
Is this a stable community or a rapidly changing one?
What employing industries are there in the community?
Are they
varied or does employment depend on one or two industries (i.e. so
that a depression in them would seriously affect the financial
status of the membership of the co-operative)?
Is business fairly good?
(1i.)
Is employment fairly stable?
Are the residents accustomed to participation in community (joint)
activities (picnics, literary association, labour unions, etc.)?
Are there capable leaders available for work in organising and
directing a co-operative?
II.
Local Competition - Existing Agencies
Number, type and approximate volume of business of commercial
enterprises in the locality (grocery stores, general stores,
fuel yards, gasoline stations, etc.).
Causes of dissatisfaction with existing agencies.
Possible ways in which co-operative could improve upon existing
agencies.
Competition from existing agencies would be (keen) (weak) (fair)
(unfair).
III.
Trading and Membership Prospects
How large a trading territory could a co-operative be expected to
S
E
W
have miles N
square miles
,
Number of families living in territory shown in Q.l.
Estimated number that would be interested in joining a co-operative.
Probable volume of business of the co-operative.
Is trading territory large enough so that a branch would be
feasible in the same or at a nearby town at some future time?
*
Quoted from Bulletin 1024-US Dept. of Labor, Organization and Management
of Consumers' Co-operatives in Feasibility Survey for Consumers' Co-operatives
within Seoul-Inchon Area, directed by Co-operative Education Institute, Seoul,
Korea, sponsored by Community Development and Co-operatives Committee of Korea
Association of Voluntary Agencies and Catholic Relief Services, National
Catholic Welfare Conference, 1966.
- 61 -
IV.
Trading Facilities
Can desirable store facilities be leased?
At what rental?
Are conveniences (water, electricity, gas, fuel) easily available?
V.
Financing
Can sufficient capital be supplied by the prospective members to
finance the organisation without borrowing?
Will prospective members see the necessity o± and agree to building
up adequate surplus and reserves each year?
VI.
Other Co-operatives
What co-operatives now operate in the proposed areas?
has each been organised?
How long
What percentage of the available volume of business does each
handle? How many members in each?
What proportion of the families in the locality now utilise the
services of each?
(1+)
(5)
VII.
Do the members feel that these co-operatives have been successful?
If not, why?
What associations have failed in the past in this community?
Reasons for failure in each case.
Questions relating to Operation of
the Association
Can competent management be obtainea at a cost per unit within
financial reach of the association?
Estimate a detailed budget of operating and fixed expenses for a year.
Estimate volume necessary to pay these expenses and to establish
adequate reserves.
Is there a
Probable sources of supplies for the co-operative.
co-operative wholesale association sufficiently near to make
patronage of it possible? That lines of goods does it handle?
VIII.
Summary and Recommendations
List conservatively the probable advantages of a co-operative.
List conservatively the probable di.sadvantages of a co-operative.
List the types of co-operative that, in the committee's opinion,
are feasible for a co-operative group here.
(L1)
Draw conservative conclusions as a result of the survey.
(5)
A co-operative should not be organised unless the following can
be answered in the affirmative.
Is there a definite need of more than a temporary nature
for a co-operative in this community?
Are local conditions favourable to a co-operative business?
- 62 -
Can a volume of business sufficient for economical operation
be obtained?
Can the funds necessary for capital be obtained from the
prospective members?
Can competent management be obtained at a unit cost within
financial reach of the association?
Can enough capable persons be found in the area to oversee
the affairs of the association?
B.
A Questionnaire on Consumption Habits*
Family Name:
Ae of
Responsible person
Occupation of:
Responsible person
Size of Family:
Write the number of persons who live together in the
same house, regardless of the family members listed in
official family record.
Include, for example, a
housemaid or employee attached to family.
Visitors
should be excluded,
Address of Household:
Write address plainly in order to show the exact location.
General Information and Classification
of Commodities
Where do you purchase daily living necessities, such as food, fuel,
clothing, laundry and other?
(a)
local market;
(b)
other shops;
(c)
both.
What is te distance from your house to the place where you purchase above
daily necessities?
(a)
within 1 kilometer;
kilometers.
(b)
within 1 to 4 kilometers;
(c)
more than 4
During the past month were tl.e greater portion of your purchases made with
cash or credit?
(II' more than two-thirds were made on credit, tbe answer will be credit.)
(If cash and credit and half-and-half, the answer is cash.)
(If everyt1jin was bought with cash, the answer is cash, and it is not
necessary to answer the items 4, 5, 6 and 7 below.)
If you purchased on both credit and cash during the past month, what is the
approximate portion of cash to credit?
(a)
less than 50 per cent;
(b)
more than 50 per cent.
If you purchased on credit, did you pay monthly or were payments made in
periods longer than one month?
(a)
paid witbin one month;
(b)
took more than one month to pay.
*
Quoted fromFeasjbjljt Survey for Consumers' Co-operatives Within
Seoul-Inchon Area, op. cit.
- 63 -
(6)
If you paid monthly, how much did you pay auring the past month?
(a)
('7)
less than 1,000 ...;
3,000 to 5,000 ...;
(c)
more than 5,000.
(b)
1,000 to 3,000 ...;
(c)
more than 3,000.
During past month, outside of the purchases made at ordinary market or
If any, what kind of
other shops, did you buy anything elsewhere?
commodities did you buy?
List commodities and (a)
(b)
(9)
(b)
If you purchased from places other than the ordinary market or other shops,
bow much did you buy on credit during the past month?
(a)
(8)
less than 3,000 ...;
quantity;
amount according to each commodity.
How often do you purchase food?
(a)
daily;
(b)
weekly;
(c)
monthly.
Food here is understood as such grains as rice and barley;
such as vegetables, fish or miscellaneous for side dishes.
(10)
extra foods
What were the main items you purchased during the past week?
Main items only:
commodity;
(a)
quantity;
price;
brand or quality;
(11)
How much did you buy during the past month?
commodity;
quantity;
price;
brand or quality.
(12)
Would you be interested in making monthly purchases of certain commodities?
If so, list names of commodities.
(13)
Would you be interested in making joint purchases of some of the commodities,
together with other people, in order to reduce the price?
(a)
(11I)
I would;
or (b)
I would not.
If the answer is ttYes", list the names of the commodities you would like
to purchase jointly - by name only.
If a co-operative shop should be established, would you like to become a
member?
(a)
Yes;
(b)
No;
(c)
I don't know.
If th answer is "Yes", how much would you be prepared to buy in shares?
The required information is:
(a)
500;
(b)
500-1,000 .1.;
(c)
more than 1,000.
- 64 -
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- 65 -
Important: When classifying commodities, special attenticn should be
given to the following:
NOTE:
Food
(1)
Rice
(2)
Barley
(3)
Flour
(2)
Fish
(3)
Vegetables, such as radish or cabbage only
('4)
Fruit
Subsidiary items:
Fuel
(1)
Meat
(4)
Soya bean sauce
(5)
Been sprcut
(6)
Bean curd
(7)
Dried anchovy
(1)
Briquet
Clothing (1)
Dress or suits
Other necessities:
(1)
Soap
(2)
Socks
(2)
(3)
Toothpaste
Shoes
- 66 -
Lecture Outline
Aims and Princjpes of Co-operatives and the
Applications in Different Asian Countries
by
J.M. RA1'TA
Director (Education),
mt ernat i onal Co-operative
Alliance,
Regional Office and Education
Centre for S.E. Asia, New Delhi.
I
Introduction
1.
Thanks to the organisers of the Seminar on Trade Unions and Co-operati-ves
for inviting me to speak on this important and interesting subject.
Make the following reservations:
scope of the subject is large, particularly the aspect concerning applicaHence generalisations necessary;
tion.
as the Asian region is wide and presents a great deal of diversity, many
situations may not be covered by these generalisations.
II
Nature of the Co-operative Movement
2.
A co-operative society is a form of business organisation which is
established by the members on a basis of equality to promote their common
economic and social interests. The co-operative society aims to provide goods
and services to members at costs as low as are compatible with the long-term
development by the society. The management of a co-operative society is
carried on by a board of directors elected by the society.
Co-operatives of
individual members are called "primary" co-operatives. These primary cooperatives join themselves into a federation which performs commonly required
functions involving more large-scale operations and bigger resources than those
of the primary societies. Thus, the federal structure of the co-operatives
movement, while enabling the small primaries to function independently, achieves
for the constituent primaries significant financial, managerial and technical
advantages. Also, on account of such integration, the co-operative movement, is
able to achieve significant competitive capacity.
The co-operative way of doing business has taken many forms in Asia 3.
The main forms of
from highly specialised to multipurpose societies.
co-operatives in the rural areas in South-East Asia include multipurpose
co-operatives or specialised agricultural credit co-operatives.
Since the last
World War, agricultural marketing and processing activities are being
In urban areas, the main forms
increasingly developed on a co-operative basis.
of co-operatives are the thrift and credit societies, consumer co-operative
societies, co-operative housing societies, and in some cases co-operative
insurance societies. Fishery co-operatives and industrial co-operatives for
artisans have also formed in many parts of the region.
The main aims of the co-operative movement could be broadly
4.
catego'ised as follows:
(i)
promotion of economic interest of those sections of society who are
- 67 -
individually unable to make significant economic progress;
social and cultural advancement of the members and even of the community
as a whole (emphais on educational, cultural activities, community
programmes and development of co-operative press);
strengthening the democratic and more rational forces in the community
through the specific ways in which a co-operative society operates.
(emphasis on discussions and parliamentary procedures, developing
capacities for taking initiative by members etc.);
acting as a countervailing influence on the economic and social excess
operating in developing countries (reducing economic inequalities,
building social cohesion amongst members, opposition to exploitation by
money-lenders-cum-traders, etc.).
III
Co-operative Principles and their Practical Application
Early in the iineteenth century,
5.
published a set of principles which came to
These principles were further
Principles".
Subsequently, the following principles were
as applicable to all co-operative societies
(i)
the British
be known as
examined by
accepted by
Consumer Movement
the "Rochdale
a committee of the ICA.
the ICA Congress in 1937
open membership;
democratic control;
limited interest on capital;
dividend on purchases;
cash trading;
political and religious neutrality;
and
promotion of education.
Present Principles
6. In 1964, the 10k appointed a Commission on Co-operative Principles to
examine the fundamental principles of cc-operative activity in the context of
the present-day economic, social and political situation and to suggest whether
The report of the Commission was
any of the principles should be reformulated.
considered by the ICA Congress held in Vienna in September 1966 and the following
principles were adopted;
membership of a co-operative society should be voluntary and available
without artificial restriction or any social, political, racial o
religious discrimination to all persons who can make use of its services
and are willing to accept the responsibility of membership;
Their affairs
cc-operatives societies are democratic organisations.
should he administered by persons elected or appointed in a manner agreed
by the members and accountable to them. Members of primary societies
should enjoy equal rights of voting (one member, one vote) and participaIn other than primary
tion on decisions affecting their societies.
societies, the administration should be conducted on a democratic basis
in a suitable form;
(iii)
share capital should only receive a strictly limited rate of interest, if
any;
- 68 -
(iv)
surplus or savings, if any, arising out o± the operations of a society
belong to the members of that society and should be distributed in such
manner as would avpid one member gaining at the expense of others.
This may be done by decision of the members as follows:
by provision for development of the business of the co-operative;
by provision of common services;
(a)
(v)
(vi)
or
by distribution among the members in proportion to their transactions
with the society;
all co-operative societies should make provision for the education of
their members, officers and employees and of the general public, in the
principles and techniques of co-operation both economic and democratic;
all co-operative organisations, in order to best serve the interests of
their members and their communities, should actively co-operate in every
practical way with other co-operatives at local, national and international levels.
These principles indicate the aims and special character of co-operative undertakings as distinct from private or public enterprises. In addition, they are
good business rules too which have stood the test of time. Their non-observance
has been the cause of many a failure. A correct interpretation and application
of these principles are, therefore, very essential for the success of all
co-operative societies.
The principles are discussed below one by one, but on account of their
7.
close inter-relationship, references to other related principles have been made
wherever necessary.
0.
Open and voluntary memberships
Two fundamental considerations relevant:
those who make use of the services (the service association) of a
co-operative society should and do become its members, and conversely,
the membership of a co-operative society consists of persons whose
needs and services the co-operative supplies;
the co-operative movement being a social movement welcomes all
eligible members to join the society appropriate to their situations
and needs; even more it encourages and assists them to join such
societies.
9.
Implications:
aim of the society to supply goods and services required by members and
not to make profits, Hence, it should be open to all persons without
any discrimination on the basis of race, religion, caste or political
opinions they hold;
all members enjoy equal rights and they are free to join or leave the
society;
this principle gives the movement its ideological appeal of universality
and solidarity among members on the basis of common interests;
uniting members on a common platform, irrespective of their interests,
makes for singleness of purpose for achieving common social and economic
goals;
open membership enables the society to achieve increase in size with
admission of new members (especiallj relevant in consumer societies or
agricultural marketing societies). Thus possible to acquire needed
- 69 -
capital for undertaking wholesaling processing and/or production
activities.
In consumer societies, the vast membership also provides
the markets for the goods processed or produced by them;
(vi)
the freedom to join or leave ensures that te movement is not burdened
with unwilling members. It would also keep the socjee
management
alert and responsive to the nees of members. Maintenance of continuous
dynamism and achievement of higher standards of efficiency essential if
members'loyalty is to be sustained and new members are to be attracted.
10.
(i)
(ii)
Application to Asian Countries:
the policies pursued by the cooperative societies in most countries of
the region are not aggressive as regards expansion of membership is
concerned.
Hence, maay credit, marketing and Consumer cooperatives have
tended to remain small organisations;
ideally speaking, the individual should be free to join as well as withdraw from a society. Emphasis on voluntariness and absence of
compulsion.
This freedom, however, is rarely absolute. His entry or
exit should not affect the society adversely.
Some examples from the
Asian zegion given below.
Selection of members in unlimited liability credit societies of
vital importance. Even in limited liability societies, persons
who are likely to damage the interests of the society and of the
majority of the members could be kept out. For example, moneylenderscumtrac9ers in agricultural credit, marketirg or consumer
cooperatives. Also exclusion of noncredit worthy persons from
urban thrift and loan societies.
Such refusal is justifiable on
grounds of maintaining internal harmony.
(Bad characters,
irresponsible individuals and troublemakers should be kept out);
the principle of open membership of universal application in respect
The existence of institutional sources
of consumer cooperatives.
in many Asian countries. They have achieved success due to:
-
assured clientele;
-
creditbuying facilities;
-
mutual knowledge among members;
-
societies getting adequate finances as members are
fixed.-.income earners;
-
better leadership available in view of good educational
background of members and mutual knowledge.
Consequences
-
limitation on growth;
-
inconvenience to members as members have to carry their
goods over long distances from shops located on business
premises t.o .their homes;
-
feeling of cooperative solidarity within the entire
movement difficult to develop;
capacity of the plant workers' productive society may not allow
admission of all workers seeking employment or membership. Such
limitations justifiable;
in case of cooperative farming societies and industrial cooparative
In the case of industrial societies,
societies, some abuses exist.
the society is operated in the interests of the master craftsman.
- 70 -
In the case of farming societies also, the erstwhile landlords
operate the societies in theiz' own interests while enrolling tenants
or labourers as members.
Also profit-seeking entrepreneurs, e.g. in cities like Bombay, start
co-operative housing societies and earn handsome profits;
(e)
an unwilling farmer or a small group of such farmers by refusing to
join a co-operative farming society can hinder the possibilit of
significant economic betterxaent for a majority of farmers.
There are similar examples with regard to managing irrigation schemes
or in adopting aerial spraying of pesticides.
A small group of farmers can frustrate the whole plan of action. In
such cases, in the interest of the whole community, compulsion could
be exercised by the Government, forcing the recalcitrant members to
fall in line;
In multiracial or multireligious societies, sometimes a society may be
confined to only one group, br example, soc±èties organised on racia.
basis in Malaysia;
ordinarily a consumer eo-operati.ve society should aim at enrolling members
from the general public through the use of patronage dividend, and no
distinction made with regard to selling between members and non-members.
Consumer co-operatives in Asian countries operating schemes for
distribution of rationed or controlled goods. However, not much efort is
made to enrole non-members. Problems arise as to how to sell non-rationed
commodities in short supply to members and non-members e.g. imported
articles in Ceylon or confiscated goods purchased from ostoms
authorities in India. Whether to sell on "first come first served" basis
or to give preference to members;
question of "srmpathiser members" who do not need the services of
co-operative society but whose inclusion in membership is of vital
importance as they provide leadership.
(Example: Mr. Saraiya, Dr. Gadgil and Prof. Karve)
Democratic Management
Democratic management of a co-operative society is organised on the basis
of "one member one vote" as distinct from "one share one vote" in capitalistic
enterprises.
It signifies that a co-operative society is an association of
human beings who ccme together on a basis of equality and not of capital. The
control of the operations end management of the society is ultimately vested
in the mernbers who have equal rights and the actual management is entrusted to
a board of directors and managing committee elected by the members. The
administrative structure, however, differs depending upon the size and depending
upon whether the society is a primary or a secondary society.
Primary Societies
Small societies. Organisat ion is simple - often honorary management.
Election on the basis of one member one vote.
l.
larger Societies
While the basis principle of a democracy remains the same, another form
of organisational set-up becomes necessary in large societies having several
thousands of members. In these societies the useful method adopted is that of
representative democracy. Under this system, instead of one general meeting,
the members are convened to a number of branch or district meetings. The
agenda in these district meetings, of course, cover the whole field of society's
operations and not simply branch or district affairs.
- 71 -
14.
Oonseciuences:
(1)
personal knowledge of officers and candidates diminishes giving place to
impersonal relations between administration and membership;
(ii)
as the scope and complexity of society's operations increase, it outruns
the ability not merely of the ordinary members but of their elected
representatives also to keep track of them and effectively control the
In this context, a judicious balancing of centralisation by
society.
decentralisation is necessary. It is necessary to improve the qua2iy
and qualifications of elected officers, and the attempts to train
members of management committee.s, also the authority of the local
committees with regard to local matters should be strengthened.
15.
Secondary Societies and Pederations:
principle of one member one vote should be the undarlying basis of the
constititions of these societies as well. This principle would work
well where the size of the member sooieties is generally uniform and
there is no great disparity between them. Another method in larger
secondary organisations which is usually adopted is to base voting power
upon the strength of the individual membership of societies. The number
of delegates a society can send to the general assembly is thus based on
its membership. This is a strict application of the principle of one man
To avoid the dominance of large societies, a limit is often
one vote.
placed on the number of delegates a society can send to the general
assembly;
in some cases the principle of patronage is in.ti'oduced as an additional
element in fixing the voting power of the societies. Representation thus
is given on a combined basis - (i) a certain number of delegates on the
basis of membership; and (ii) additional delegates depending upon its
volume of business with the federation. According to the Principles
Commission, this element may be a desirable concession for the sake of
unity, equity or efficiency or a combination of these factors.
16.
Application to Asian Countries
In developing countries of the region, there are a number of factors
which make the application of the principle of democracy in cooperative
societies rather difficult. These factors include widespread illiteracy in
some countries of the region and low level of education in many. The members
are just beginning to learn côoeration and they are not always sufficiently
well equipped by themselves to manage their societies successfully. Hence
This guidance comes from
outside advice and guidance becomes necessary.
usually two sources:
institutions and individuals in. sympathy with cooperative methods
and ideals;
and
the Government.
t
Andther reason why Government is interested iii the co-operative
17.
movement is that it recognisea cooperatives as suitable agencies for promoting
social and economic development which the Government is attempting to foster
under it
economic plans. Also, the Government regards cooperatives as proper
agencies for undertaking certain tasks on its behalf on considerations of
equity and economy in administration o± its schemes, for example, for distribution
of scarce commodities through consumer cooperatives in India said Oeylon, or
distribution of agrLcultural requisites to farmers such as fertilizers, the
Government would otherwise have to set up extensive distribution machinery or
would have to distribute it through profitmaking channels.
- 72 -
18.
In order to foster co-operative movement, Government provides
assistance to co-operatives in a number of ways:
in most countries of the region, there are government co--operative
departments to plan co-operative development and to give advice,
guide, to supervise and to audit the co-operative societies;
financial assistance in various forms is provided to co-operatives.
This assistance may be provided in the form of loans or outright grants;
for example, in several countries asoistance provided for land reclamatioyi
and soil conservation by co-operative farming societies, and construction
of store houses, purchase of machinery and other equipment by agricultural
societies,
Development of co-operative sugar factories in India an outstanding example of such assistance; loans often provided at concessional
rate of interest in order to increase agricultural production.
Government also provides help to augment the share capital of
19.
co-operative institutions at the national level by way of direct contributions
to share capital or provision of loan capital: for example, government
assistance in funds to Co-operative Bank of Nepal or government assistance
in setting up the Bank for Agriculture and Co-operatives in U1hailand and share
capital contributions to the co-operative banking structure in India.
20.
Government provides guarantees on behalf of co-operatives for the
payment of principal and interest, for example state Governments providing such
guarantee to the Reserve Bank of India and other Lgencies for debentures floated
by co-operative land development banks; the Government providing guarantees to
commercial banks for loans issued to consumer co-operative societies.
Government also provides assistance to co-operative federations and
21,
unions for propaganda and educational work.
Some Consequences
The above assistance by the Government has some consequences as
22.
Democracy implies autonomy in
far as operation of democracy :is concerned.
the sense of independence of external control apart from,of course,their being
subject to the same general laws as all other business undertakings;
as part of the planning process, the Government sets up targets of
co-operative development: quite often this results in very speedy
organisation of co-operative societies without proper preparation of
members by way of education. A number of societies therefore are not
able to develop stability, e.g. consumer co-operative societies
developed during scarcity conditions especially in war periods. Then
government assistance withdrawn, the consumer co-operative movements by
and large collapsed;
in order to safeguard public money invested in co-operative organisations
and in order to prevent abuses of privileges accorded to co-operatives,
Government nominates members on the Board of Directors. Because of the
prestige and position of these government officers on the Board of
Directors, the elected representatives may tend to leave decision-.
making -t;o those people whom they may consider to be more qualified than
themselves;
Cc)
Government also deputes its own officers to work in the co-operative
Thus, these factors tend -to develop the co-operative
orga.nisations.
movement not merely as an instrument for implementing government
development programmes but more as its own arm or its own department.
Quite often, ordinary people fail to recognise the dist:inction between a
co-operative society and a government department, and many members are
found saying that the co-operative society is a government institution.
I
- 73 -
another factor which affects the operation of democracy in co-operative
institutions is the wide social and economic disparities amongst the
In rural societies, there are differences
members of co-operatives.
amongst the members on the basis of economic status, caste, race and
The newly-developing, communities in Asia are yet too much
religion.
tied by these factors. The loosening of these factors and the
development of a more homogenous community as well as the fostering
of democratic attitudes in places of authoritarian relationship based on
status will take time;
the development of enlightened membership, competent leadership and
skilled cadres of staff is a long-term task which needs an intensive
and extensive programme of education and training. The building up of
democracy in co-operative organisations is therefore going to be a
The Government itself has
painfully slow process in most countries.
Some suggestions in this
an important role to play in this context.
context may be made as follows:
the co-operative development programmes should be drawn up by the
Government in full consultation with the leaders of the co-operatives
in the context of the capacity of the co-operatives. The
co-operatives should not be asked to shoulder responsibilities for
which they are not ready or which they cannot take up within a
certain period of time;
the government nominees on co-operative boards should work more as
advisers and consultants and should foster discussion and decisionIt should be one of their
making by the elected representatives.
tasks to ensure that voluntary leadership develops.
Sustained programmes of education and training should be developed.
Limited Interest on Capital
The role of share capital in a co-operative society is different
23.
In a co-operative society the owners, i.e.
from that in a private enterprise.
contributors of share capital and the users of the society are the same persons
and the aim of the society is to provide goods and services at as low cost as
possible keeping in view the long-term development of co-operative business.
Thus share capital represents savings made available by members to the society
for business purposes; it is not risk capital employed for earning profits. In
a private enterprise, e.g. in a joint stock company, the role of capital is
The aim there is to earn as much a dividend on share capital
quite different.
as possible contributed by s'arehclders.
24.
Reasons:
the belief of the pioneers of the co-operative movement in the nineteenth
century to build up an equitable society on account of their distrust of
the distribution of property and incomes arising therefrom;
people who possessed capital received enormous returns and thus acq,uired
An attempt on the part of the pioneers to break
great power in society.
the bond between capital and power by limiting the interest on capital;
while it was recognised that capital added productivity to labour, the
conception in the co-operative society is that of labour working with
The distribution of the surplus that arises
capital and not for capital.
therefore is on a different basis in a co-operative society than in a
private enterprise.
25.
tested;
Por situations in which the principle of limited interest can be
- 74 -
when no interest is paid on capital, no clash with the principle;
where interest is paid but deliberately kept below the rate which may be
regarded as fair elsewhere, this is also a case of paying limited interest;
where limited interest is paid for certain periods but is adjusted not in
response to shortterm fluctuations in the money market but rather in
response to longterm movement of the interest rates, this limit is a
fair limit as capital and not specifically as share capital;
where a premium is merged into interest rate, to induce the lender to put
in more share capital, cooperatively speaking this is a dubious
practice.
Naturally, the larger market conditions have to be kept in mind but
the important point is to ensure that the interest paid on capital does not
become speculative remuneration in a manner sinular to the rate of interest
paid in profitmaking enterprises.
Since share capital made available by the
members represents their savings, it is natural that they should receive a fair
rate of interest on savings which they could obtain if they put in th.s capital
jfl aaiy longtemigovernment securities or probably in fixed deposits in commercial
banks.
Application in Asian Countries:
in most agricultural cooperative societies the cooperatives find it
difficult to pay a fair rate of interest on share capital contributed by
members in view of this great difficulty for societies to acquire a
sufficient amount of share capital. This greatly hinders the development
of cooperatives;
in certain countries, such as Malaysia and Singapore, urban thrift and
loan societies have built up large reserves on account of the sound
policies followed by them of paying limited interest on capital. The
question now engaging the attention of these movements is how to utilise
the reserves accumulated by the societies for the common benefit as they
are indivisible.
Sometimes some members of course put pressure on the
societies to divide the reserves amongst the members on the basis of
share capital contributed by them. A question was also posed to us by
one of our member organisa-bions whether they could distribute the
accumulated reserves in the form of a bonus to the members. Since this
would be an oblique way of paying profits on share capital which would
be more than the fixed and limited rate of interest, we had advised
against this practice.
In view of this, it is essential for the thrift
and loan societies in such countries to play a critical role in fostering
cooperative development in other areas.
This has happened in Malaysia
where cooperative housing, cooperative insurance and a cooperative
printing press have been developed;
in most Asian countries, cooperative societiest by.laws lay down the
maximum rate of interest.
Thus the law and the bylaws ensure that
interest rate above the fixed maximum will not be paid.
However, if
this bylaw needs to be amended, it will require twothirds majority.
Thus if the societies need a capital interest, the raising of more
capital through a further limitation of the rate of interest may cause
problems as the amendment can be carried out only by a twothirds
maj ority.
Disposal of Surplus
28,
In a cooperative society, strictly speaking, there are no profits.
The surplus which arises in a cooperati-ve business is on account of the
deliberate policy adopted by the society of charging a price higher than the
costs incurred on securing the goods and services.
This precaution is necessary
for a variety o± reasons:
(i)
in order to provide a cushion against unexpected
- 75 -
(ii) for building up capital for development purposes;
fluctuations in prices;
and ('i&j) for providing certain collective services to the members. Thus
pricing policy and creation of surplus closely inter-related.
Two main q.uestions to be kept in view regarding disposal of surplus:
29.
(i) to find the proper balance between the interest of the individual members
and those o± the society as a whole (i.e. collectively of the members as a whole);
and (ii) to do justice as between one thdividual member and another.
The benefits conferred by co-operative societies on their members
30.
are of various kinds:
they may take the form of money, goods or services;
the benefits may be immediate, short-term or long-term;
some benefits can be enjoyed individually while some others may be enjoyed
collectively.
Iii testing in what forms and in what proportions the surplus shall be
31.
allocated, the members as a body have to use their judgment and decide on the
With regard to the disposal of the surplus, the following
above q.uestions.
operational aspects may be kept in view:
a number of societies provide the goods to members at such low margins
that there may not be any surplus worth distributing. Por example,
many agricultural supply societies supply agricultural req.uisites to
their members at prices so near to cost that there is not much margin
left (immediate benefit given);
the second consideration is the need for development whereby the society
may decide to place the whole or a large part of its surplus to reserves
or capitalise it for development purposes.
This policy of capitalisation
of surpluses has been a crucial factor in. advanced movements in developing
their economic power;
the societies may devote a proportion of their net surplus to the provision
of services for the common enjoyment of their members, e.g. building of
community centres or recreational facilities, undertaking cultural
activities or provisions for educational purposes;
after all the above considerations have been taken into account, the
society may distribute the surplus on the basis o± purchases or the use
This principle ensures that the
made by the members of its services.
members receive a part of what they have been over-charged. Use of
patronage dividend in advanced cc-operative movements especially consumers'
In case of non-members, dividend not
movements to enrol non-members.
withdrawable, but used, when it reaches a certain amount, for giving the
member a share in the society. A very simple and fine device since
people become members by simply starting to shop at the co-operative
The most important advantage of the patronage dividend is that
store.
i5 offers to the members short-term advantages. The decision to give an
amount of patronagA dividend is related to the price policy. Example of
Another advantage of the patronage dividend, is. to
UK and Sweden.
buttress the loyalty of the members; the more they shop at or use the
services of the society, the more they gain.
32.
(i)
Application:
in some advanced movements a practice has developed to stabilise or even
standardise the rate of dividend. Thus, the managers include this rate
of dividend in the price which they charge. Thus the system is turned
Also, in some cases in order to maintain this fixed rate
upside down.
of dividend, the management may draw upon the reserves or development
- 76 -
funds.
This temptation, according to the Principles Commission, should
be resisted;
it should also be mentioned that the private enterprises in some cases
have also started declaring a fixed dividend on. purchases, thus
nullifying the effect of patronage dividend of co-operative to strengthen
loyalty of members;
in developing countries many societies both in rural and urban areas do
not attain surplus. Great nmed to development management efficiency;
in Asian countries where the societies attain surplus, the co-operative
laws make various provisions on the basis of which surplus has to be
distributed to reserves, common good funds, etc. In several countries,
25 per cent of the net profits are expected to be ploughed back to
reserves. However, usually the size of the society and the size of the
surplus is so small that sufficient owned funds are not built up by a
large number of primary societies; the financial position of co-operative
societies generally remains weak;
the pricing policy usually followed by the co-operative societies,
whether consumer societies or agricultural marketing societies, in the
developing countries is to follow the market price. However, there are
various ways in which the private enterprise is able to undercut the
co-operative societies, e.g. through adulteration, evasion of sales and
other taxes,etc. Thus the competitive situation of the co-operative
remains weak;
limited interest on capital and the considerations mentioned above
regarding disposal of surplus highly relevant in developing selffinancing and building financial independence of co-operative movements.
The highest organs of the co-operative movement (e.g. apex oranisations
r1 national congresses) need to give adequate attention to these
questions.
Co-operative Education
The co-operative movement has deliberately emphasised the importance
of continuous and constantly rising standards of education. The ICA Commission
on Co-operative Principles, 1966, has elevated it to a regular principle from a
subsidiary one.
factors:
This" emphasis on education arises on account of the following
the ideology of co-operation emphasises the aspect of mutual help and
different principles of organisation and operation for the co-operative
enterprise; these need attitudes, motivation and knowledge on the part
of members which are different from those required in a profit-seeking
environment; co-operative movement democratically managed. Hence
education of members who ultimately control the co-operative organisations
should receive proper attention;
the co-operative enterprises function in competition with other forms of
economic organisations. Hence there is a continuous need for training
of board members and staff training. Training programmes required in
co-operative ideology and its organisational set-up tecimical skills as
well as economic and social environment;
the co-operative movement seeks to continually expand its frontiers and
coverage; it must also create an environment for itself where there is
sympathy for its goals, aspirations and modes of operation. The
co-operative movement must formulate its policies and express its points
of view which is in the interest of the whole body of consumers or
producers on issues of public policy affecting them. As the Principles
Commission points out "the battle for the acceptance of co-operative
- 77 -
ideas has to be fought in the intellectual as well as in the economic
field";
(iv)
social and economic changes are fast taking place in the modern world. A
highly dynamic situation. Heice, co-operative education has to be a
continuous process to update the members, board members and employees.
Situation in Developing Oountries
35.
Member Education
Those
Almost all movements have programmes of member education.
The
programmes are generally operated by the unions or the federations.
For the
primary societies do not take as active an interest as they should.
members educational programmes are carried out in a decentralised manner by
holding one-day or two-day courses, through film shows, group discussions,
radio talks and material put out in the form of co-operative periodicals and
publioat ions.
36.
Education of members is generally carried out on the following:
principles and aims of co-operation;
organisational set-up of co-operatives;
rights and duties of members;
some elementary economic education which is of immediate relevance with
regard to their co-operative societies.
37. More intensive, education is given to board members. The subjects
emphasied for them include elements of cc-operative law, by-laws, parliamentary
procedures and elements of accounting and management.
38.
Some Problems:
member education techniques adopted are such that they do not generate
(i) that the cost
auto-activity amongst the members with two results;
of operatin and supervising the education, programmes becomes very
heavy;
(ii5 the educational programmes for member remain one-time
affairs;
difficulties of communication arising out of widespread illiteracy in
some countries and low levels of education: hence, the use of audiovisual methods necessary. Also it is essential to impart to members
general education involving literacy and other matters until these
functions are performed by the Government;
the education is more general and usually emphasises idealogical aspects
compared to practical aspects. Questions concerning operations of
societies, their problems and developmental programmes are not emphasised
adequately; also programmes for improving the farm economies of members
of agricultural societies and household economics of members of consumer
societies are insufficiently attended to, barring some exceptions;
sufficient education is not carried out prior to establishing a
co-operative society;
However, by and large
societies do contribute towards education funds.
considerable dependence on government funds for education purposes
(also applies to staff training).
- 78 -
Staff Training
39.
Rapid development of the co-operative movement in Asian countries
during the post-war period and hence a general reoogni.oi of the.ied for
providing staff training facilities. In almost all countries of the region such
as Iran, Pakistan, India, Ceylon, Malaysia, Nepal, Philippines Korea and
Thailand national co-operative training centres are establisheà. Some countries
even have sub-regionaL training oentre. The bulk of the trainees are drawn
from government co-operative departments partly because of the existence of
large government departments and partly because of the deputation of government
officers to co-operatives. Combined courses held for various categories of
personnel whose background isheterogenous.. Hence the course content is basic
and somewhat general except in few training centres not adequate emphaiss placed
on.management and operational techniques of various types of co-operatives.
Recently, however, a trend visible for organising specialised short-term courses
geared to the needs of board members and particular groups of employees.
40.
Some Problems:
movement often unable to spare their employees thereby reducing the
effectivity of the training centres;
the effectivity of training work is closely related to personnel
management policies consisting of recruitment, remuneration and promotion
questions. No consistent policy in this regard.
Hence the movement
unable to attract the best talent;
also difficult to retain trained
personnel after training;
lack of competent faculty in the training centres, especially for teaching
management;
lack of sufficient research programmes which could give an insight to the
teachers in operational questions faced by the co-operative societies;
inadequate emphasis placed on practical training involving research
projects or other practical project work by trainees.
41.
Education of the Public in Co-operative Matters
The main techniques under this head include the following:
press and publicityej
of the country as a whole as well as co-operative
press (radio, talks, articles in the daily newspapers and the co-operative
press, general discussion forums, university studentsco_operatives, etc.);
annual congresses and other important functions such as the observance of
the International Co-operative Day where important leaders from
different sections of public life are invited;
instruction ir co-operation given in the universities either as part of
agricultural economics courses or even as an independent subject.
42.
Some Problems:
broadly speaking, the participation by the leaders of the movements in
the public issues affecting co-operatives is relatively less; their
voice in planning of co-operative development programmes also inadequately
represented;
the private newspapers highlight the failures of the co-operatives and
problems faced by them rather than their achievements;
the movement not recognised in most countries as a force in the economic
and social life of the country, although its potential value recognised.
- 79 -
Educational Activities at the International Level
43. International organisations including the bA, I10 and the PAO,
organise educational programmes to supplement the educational work carried out
by the national movements. The ICA has established the Regional Office and
Education Centre for S.D Asia in 1960 and the RO in East Africa a few years back
in Moshi, East Africa. Education Centre also established by the Swedish Cooperative Movement for East Africa. The ICA,R0 and DO so far as organised 77
educational activities of various types involving more than 2000 participants.
Advanced member movements of the IOA have also established training
centres for training of co-operators from developing countries. These include
facilities created in UK, Sweden, Denmark, Czechoslovakia, USSR, Israel, USA,
Canada and Japan.
Co-operation Amongst Co-operatives
The ICA Commission on Co-operative Principles added the above
44.
principle for fostering co-operative solidarity amongst different tiers and
sectors of the movement. Co-operation amongst co-operatives may be categorised
in the following three groups:
co-operation between primaries and their secondary societies at the
provincial and national level;
the collaboration among diferent sectors of the movement;
international co-operation.
Co-operation Among Co-operatives at Different Tiers
In most countries the primary societies have established their
45.
federal organisations at the district, provincial and national levels in various
fields e.g. in the field of credit, marketing, consumer activity, propaganda and
The necessary co-ordination among the units at the various
educational work.
tiers is, however, not such as makes these co-operatives a strong force. The
primaries complain of lack of services from the secondary organisations while
Sentiment of
the secondaries complain of lack of support from the primaries.
attachments of local people to their units an impediment to centralisation of
Also persons of responsibility in local organisations may
certain functions.
find their social status diminished, as a result of horizontal or vertical
Lack of capital, lack of availability of skilled managerial and
integration.
other personnel impairs the efficiency of federal organisations; this factor is
of crucial importance in the success or otherwise of co-operative movement.
Co-operation Among Various Types of Oo..-operatives
Such co-operation essential from the point of view of developing
46.
ideological unity of the movement as weLl as business strength. Examples (i)
co-operative credit societies in Malaysia have helped in developing the
Such mutual support could
co-operative insurance society and housing societies.
(ii) various national
add to the strength of each sector of the movement.
organisations are members of an idealogical body (e.g. the Co-operative
Pederation of Ceylon, the National Co-operative Union of India, etc. However,
active functional contacts between the various types of co-operatives are not
Reasons for the absence of such active collaboration may be the
strong.
following:
basic clash of interest between the membership of two types of
co-operatives, e.g. agricultural marketing and consumer stores.
(Possibilities of economic advantages for both by collaboration
exist in. view of a large number of middlemen);
lack of appreciation of such collaboration; this factor responsible at
the highest level for the leaders to see that they are a part of a
- 80 -
social and economic movement which has wider implications for the
transformation of the society as such (lack of collaboration between
the credit societies in rural and urban areas);
(iii)
uneven development of various cooperative sectors e.g. of credit
societies on the one hand and marketing and consumer stores on the
other.
International Collaboration
This collaboration may take the form of (a) ideological collaboration
particularly in the field of education and training; and (ii) economic collaboration.
Ideological Collaboration
Regional seminars of international organisations such as the 110,
ten years of functioning of the ICA, RO and EC with an Advisory Council
drawn from member movements has created a feeling of solidarity amongst the
Asian movements - their participation in educational programmes, providing local
facilities and sharing of costs; ACCI, the Philippines, LDACA in Japan and VI
Mehta National Institute of Cooperative Management and School of Cooperation
at Polgolla also receive foxeign cooperators for training.
PAO;
All this international exchange is bound to affect pcsitivel3i the
growth of cooperative movement in Asia. J-Iowever, greater attention needs to be
paid to careful sifting of experiences of one movement for application to
another movement.
Economic Collaboration
Numerous examples exist of economic collaboration amongst advanced
movements In the West, e.g, Scandinavian Cooperative Tholesale Society with a
total turnover of over 500 million Danish crowns,the tnternational Cooperative
The ICPA has formed links with a few developing
Petroleum Association, etc.
countries such as India, Ceylon and Pakistan.
Efforts of IOA in Asian Region
International Trade
The subject of international cooperative trade was discussed at the
Cooperation Ministers' Conference organised by the ICA in Tokyo in 1964, a
survey on the subject for the region was completed in 1966; a Trade and
Technical Assistance Section in the RO was set up in 1966.
Issue of Trade Directory and the Trade Information Bulletin;
participation by 15 movements in the region on a selffinancing basis under the
auspices of the ICA at the Second Asian International Trade Pair held in Teheran,
holding of the Coamodity Con±erence in Tokyo in May 1970, export of a small
shipment of sugar molasses from the NAPED to the TJNI000PJAPAN as well as further
contracts for export of deoiled cake.
JapanThai Trade and Aid Agreement:
export of maize by Thai cooperatives to the Japanese movement, volume of
maLze exported in 1969 amounted to around 42,000 metric tons;
technical assistance and training provided by the Japanese movement in
improving the productivity and trading efficiency of the Thai cooperatives;
the two movements propose to set up a factory in Thailand for manufacture
- 81 -
of agricultural chemicals and creating loading and unloading facilities at
a harbour for maize operation;
(iv)
provision of display facilities by the Thai co-operatives for the farm and
household products such as tractors, agricultural chemicals and consumer
articles exported by the Japanese co-operativeS.
54. Survey of agricultural co-operative marketing projects in India and
Indonesia with the assistance of the Japanese co-operative movement for developing
export of raw material for animal feeding stuffs to Japan.
Technical Assistance
55. The Co-operative Dairy set up. in Maharashtra State of India with aid
aid amounted to Rs.l.5 million,
from Test German Consumer Co-operative Congress;
the total investment in the dairy co-operative being Rs. 4.2 million.
56. A number of economic projects formulated by the movemeni in the
region have been forwarded to the ICA for procuring assistance: main ones are:
(±)
multiconrniod.ity fruit an
vegetable processing unit, IAFED, India;
consolidated fruit-processing plant, NAOP, Korea;
pineapple canning project, Ceylon;
requests for co-operative printing presses by the East and Wèsi Pakistan
cc-operative Unions.
57.
Some Problems in the yield of Trade:
trade restrictions in Asian oountries e.g. export of molasses in India;
weak supply position of co-operatives in Asian countries due to lack of
integration between the primaries and secondaries resulting in inability
in fulfilling contracts, etc;
problem of quality control;
hesitation on the part of the advanced co-operative movements
their sources of supply.
58.
to change
Problems in Technical Assistance:
the advanced co-operative movements are able to provide expertise but not
capital;
the efforts of the advanced movements for giving aid must be matched with
This involves government to
government technical assistance programmes.
government relationship and putting up of a request by a government of the
developing country, co-operative projects not necessarily on high priority
lists.
- 82 -
CONOLUSIOI'T
The co-operative movement has been recognised as an important
instrument of social and economic development in the Asian countries. The cooperative movements exist in some countries since the last fifty or sixty years
while in a few others e.g. Nepal, they have been introduced during the post-?war
period.
The co-operative movement is potentially amongst the greatest systems
conceived by social thinkers. The aims f the co-operative movement defined
The Roohdale Pioneers declared their aim as that
differently at different times.
of establishing of communities supporting themselves by their own labour on their
own land. For the most part the movement did not avance along these lines 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 ideal as one of setting a co-operative
commonwealth. During recent years many co-operators, however, are content to
expect a less ambitious idea of a co-operative system acting as a countervailing
influence upon the excesses of the private sector or the inefficiencies of the
"The common element at all times has been", according to the
public enterprises.
Principles Commission, "that oo-operation at its best aims at something beyond
the promotion of the interests of the individual members who compose a cooperative at any time". Its objectives are not merely promotion of economic
interests but also raising of social and cultural levels of the members and the
community at large.
In the Asian countries as mentioned earlier, the co-operative
societies of various types have been developed. The predominent types of
societies, however, are in the agricultural field. Thile the general picture of
the achievements of the co-operative movement on a nation-wide scale is not rosy,
there are significant examples of success in various countries: these examples
include the supervised agricultural credit projects in Thailand, East Pakistan
and India; the multipurpose societies and the agricultural co-operative movement
as a whole in Japan; co-operative insurance societies in Japan and ]Vlaleysia;
.Amul Co-operative Dairy, co-operative sugar factories, producing one-thiaxl of the
total sugar production in the country and a strong system of agricultural
co-operative credit developed in a few states in India.
A number of problens faced by the movement in the region include:
the lack of proper organisational set-up, involving relatively small
size of societies and weak relationship between the primaries and the
federations;
lack of adequate capital and the need for developing self-financing,
through proper application of the principles of limited interest on
external assistance either from the
capital and disposal of surplus;
Government or foreign sources given in a rational fashion can stimulate
co-operative growth;
lack of co-operative discipline and loyalty among the members;
lack of proper personnel policies comprising recruitment, remuneration
and. finally
and promotion and training facilities;
(A high degree of social and
lack of honest and able leadership..
economi? stratification based on ownership and cultivation of land,
reinforced by other factors such as caste, race and religion, is an
impediment.) There proper leadership has been available, striking
co-operative successes have been achieved.
- 83 -
Denmark - A Case Study
I.
The Danish Co-operatives
by
Henrik IIE
General Background
The co-operatives in Denmark have been in existence for more than
1.
This in itself ex100 years and the trade unions for nearly the came periodS.
But in order to underplains the present stage of development and stability.
stand the rather rapid development of these and other mass-organisations it is
important to point out some preconditions, created in the 100 years before that.
The land reform (1788) bringing rural population from serfdom into selfAlso villeinage was abolished, so
ownership of land, cattle and houses.
Denmark never had a violent revolupeople could live where they liked.
On the contrary the land reform took place at a time when
tion.
violence was ruling in other places of Europe;
second step was an education reform (1814) introducing compulsory teaching to all children for 7 years;
the introduction of political democracy (1849);
the tradition of a relative freedom in handicraft was never quite broken
The new industries
down by an industrial revolution as e.g. in Britain.
created in the latter part of the nineteenth century were rather small
and continued to a certain extent the traditions in handicraft.
The Early Industrial Development
The industrial development in Denmark came relatively late (after
2.
European Standards).
It sped up in the last quarter of the nineteenth century.
It was based on the following conditions:
a fundamental change in agricultural production from an extensive production (and export) of grain to intensive farming, importing grain for
This secondary agricultural production made the basis
animal husbandry.
for a strong increase in the export of butter, bacon, cheese and eggs to
the British and German markets.
In the years from about 1870 to 1914
Denmark had a steady and unique economic growth, starting in agriculture
and rapidly spreading to other trades;
connected directly with agriculture new food industries as e.g. dairies
and slaughterhouses were established in most cases on a co-operative
basis;
the increased needs for agricultural equipment and machinery formed a
basis for a growing mechanical industry;
the increase in export to Britain meant increased possibilities for the
Danish shipyards;
finally, the increase in demand for consumer goods gradually created
expansion in the production of consumer goods.
The Creation of Co-operatives
The first Danish co-operative was a consumers' society, founded in the
3.
small town Thisted in 1866 of the local vicar, who had heard of the Rochdale
pioneers and wanted to benefit the poor workers.
Even if sobie other consumer
societies were founded in the following years - of which a great part collapsed
after very short existence - the real upswing took place from 1882 when the
first co-operative dairy was founded.
Iii the next decade several hundreds of
all kind of farmers' co-operatives and consumers' co-operatives shot up almost
everywhere in the rural districts and by the end of the century the farmers'
- 84 -
co-operative movement was already very well established and had on the whole
reached the structire we know today with huge branch organisations for the
daies, the bacon factories, the selling and. purchasing societies and so on.
In 1896 the Danish Co-operative Tholesale Society (FDB) was founded.
(For
details, see "The Co-operative Movement in Denmark".)
In 1899, the Central
Co-operative Committee was founded as a main organisatioia for the farmers' cooperatives, instructing the BDB.
The labour movement started about 1870 in an organised form.
The
background for this was the rapid increasing number of industrial workers and
From the very start of the early labour movement co-operative vencraftsmen.
tures were discussed,
However, at that time the labour movement for dogmatic
reasons could not accept consumers' societies but pointed at workers' productive co-operatives which should serve as a weapon in the struggle for higher
wages and better working conditions.
Some early experiments failed, but during
the 1880s some co-operative bakeries and a few other types of workers' cooperatives were formed on a more sound basis.
In 1899 during the great struggle between the Danish TUC (Iso) and the
Employers' Federation t1e first building and contracting societies were founded
to create jobs for the locked-out workers.
Other co-operatives were established out of acute ,ituations.
The
bakeries had their special background in a situation where the prices on grain
in the world market went down but was not followed by the price of bread, which
was a basic commodity for the working family.
The workers' fuel societies were
established during the First ¶orld VTar to meet the exploitation from the private
fuel dealers because of acute shortage in coal.
The first housing cooperatives came into operation in 1912 and 1913 after a heavy crisis in the
building trades which caused great unemployment amongst the building workers.
In the beginning of the twentieth century the labour movement
gradually changed its attitude towards the consumer societies - of which the
workers themselves already had founded quite a number - and the development in
this field took speed too.
Further Development
As the trade union movement gained strength rapidly it became more and
more obvious that co-operation as a weapon for trade union purposes was neither
needed nor very suitable.
The consolidation and strength of the workers' cooperatives was in no respect so great that it could hold in an open fight against
suppliers and competitors.
The workers' loyalty towards their own cooperatives was not greab enough to gain the victory in such a fight.
However,
the workers' co-operative movement could take another part in the play as a
supplement to the trade union struggle.
This role should aim at a competitive
effort to secure fair prices, brea1 down monopolies and ineffective structures
and by this help in preserving the real value of the wage packet.
This purpose was finally and officially declared at the Congress of
the Central Union of Urban Co-operatives in 1960, which laid down certain claims
to the by-laws of the co-operatives and in the Consumers' Declaration (see
Appendix.)
It is required from any new enterprises applying for membership
that the consumers shall exert a decisive influence, directly or indirectly, on
the management of the enterprise.
It was laid down in this amendment of the
regulations that to justify the continued existence of the co-operative it was
absolutely necessary that the co-operative enterprises should serve the consumers' interests by constituting that corrective to private capitalistic
activities which would force through the lowest possible consumer prices.
The Central Union of Urban Co-operatives was formed in 1922.
The community with the rest of the labour movement was expressed in
the establishment in 1936 of the Economic Council of the Labour Movement for the
purpose of representing the trade unions and the co-operative movement in socioeconomic questions towards the Government, the Parliament and the central
administration.
The trade unions promoted from the very start many of the workers'
co-operatives, as shareholders as well as in other respects.
However, as some
- 85 -
failures occurred, which resulted in losses for the trade unions, in 1953 the
Workers' Co-operative Financing Fund was established as a means to secure sound
investments from the trade unions in the co-operatives.
12..
The advantages were obvious:
a separation of the more narrow trade unions' interests as such from the
broader consumer interests in the co-operatives;
the risk for losses was reduced as the co-operatives together with the
10 paid up a trust capital which carried no interest and can meet the
first losses before the other capital is attacked;
a reduction of the risk by the diversification of investments in different branches and co-operatives;
the use of experts to investigate and advise about suggested investments.
The fund has since its start received about 16 million D. crowns and
Together with the VIor1ers' Bank
reinvested the money in co-operatives.
(founded 1919) which is number six in size in Denmark, the fund acts as a central institution for the planning and development of the co-operative movement.
In 1960 a special Co-operative Development Board was set up for the
13.
purpose of carrying out long-term planning of the future development of the
entire workers1 movement.
The trade union movement and the co-operative movement solves the
14.
problems about collective agreements etc., on the basis of a set of "rules for
These rules the arrangement of the working conditions in co-operatives".
which originally date back to 1942 - are now stated in the fo11oiiig sections:
(i)
a declaration of principles in which it is stated, on the one hand, that
the trade unions fully recognise and support the cc-operatives as a
means to the improvement of the workers' standard of living and, on the
other hand, that the co-operative movement promises to offer wages and
working conditions at the same level as in the best private firms in the
same trades;
rules for the negotiation on collective agreements, i.e. the solving of
The right of the respective parts to make an
conflicts of interest.
open conflict in such questions are not neglected, but the whole procedure agreed upon has up to now prevented any legal strike or lockout
to take place in a workers' co-operative;
rules for settling of conflicts of right, i.e. conflicts on the basis of
In these cases no legal conflict can be estabexisting agreements.
lished.
In 1968 an agreement on industrial democracy was signed between the
15.
10 and the Union by which joint committees were formed in the greater cooperatives for consultation and in certain questions even with decisive
authority.
Some Facts About the Workers' Co-operative Movement Today
The final break-through of the workers' co-operative as a whole came
16.
Since then the increase in many a
as late as after the Second World War.
Today the union consists of the following members'
field has been very rapid.
associations and co-operatives:
The Federation of Co-operative Bakeries, whose membership numbers twentynine co-operative bakeries with a total turnover of about 120 million D.
crowns.
The Federation of Co-operative Building and Contracting Societies,
comprising fifty-nine societies with a total turnover of 675 million D.
This branch has during the latest years developed immensely.
crowns.
Prom 1960 t'o 1969 the turnover nine-folded and the market share went up
two-and-a-half fold.
- 86 -
The Federation of Co-operative Canteens and Restaurants with seventy
affiliated canteens, purchasing societies and restaurants.
The total
turnover is about 75 million D. crowns.
The Workers' Fuel Societies Council, whose membership numbers seven 00operative fuel societies with a total turnover of about 70 million.
A
new venture in this field was the establishment of an oil and petrol
society "OK-Oil" in partnership between the Danish Tholesale Society and
Union (BuB), the Swedish "OK" and the Workers' Fuel Society in Copenhagen.
This society is the only one to have direct membership both in the Central
Co-operative Committee and the Central Union.
The Federation of Non-Profit Housing in Denmark comprising 450 housing
associations and societies.
The tot al turnover in rent, etc. is
estimated at about 1,000 million, the number of dwellings owned and
administered at about 250,000 and the yearly new construction counts
about 12,000 homes;
a number of separate enterprises (directly connected to the union as members) of which to be mentioned the Retail Society HB with head office in
Copenhagen but with shops and members in almost every Danish town, a total
turnover of about 1,350 million and a membership of about 400,000; the
insurance company "AMA", which in the latest years has developed from a
very modest position to be the insurance company which has the greatest
part of all collective life insurances in Denmark; the Workers' Bank,
by balance number six in size in Denmark; three urban dairies; the
Social Democratic Press (which edits the different social democratic
dairies with a turnover of about 80 million) and some other smaller
societies.
The total number nf affiliated societies is now about 650 with a total
turnover of about 6 billion.D. crowns.
This means a seventeen-fold increase in turnover since 1945 and even if the
prices and costs have increased two-and-a-half fold in the same period and the
GNP in current prices has increased six to seven-fold, it still means that the
workers' and urban co-operatives have had a marked progress in market share and
influence.
II.
The Danish Trade Union Movement
by
John S11N1TINGSEN
Hi st orical Background
About the middle of the nineteenth century Denmark was captured by the
industrial revolution.
In the l86Os began the establishment of railways, new
companies, steamship lines, etc.
This change in the economic structure, its social and economic consequences
were so essential that they caused the workers to establish trade unions as well
as to work politically.
At that time the workers were unable to support their
families.
The workers started to create sick benefit associations which also
claimed improved social conditions.
A their claims were turned down the
workers realised that they had to unite in organisations in order to further
their interests also in other fields.
This is very briefly how the development
of trade unions and the struggle for better conditions began.
The first Danish trade unions were formed in 1871 as a section of the
International Workingmen's Association and the trade unions were the branches
of the International organised on a craft basis.
As the trade unions developed
throughout the country the leaders realised that it was necessary to co-ordinate
their efforts at the national level.
This idea was realised in 1898 with the
foundation of the Danish Federation of Trade Unions - Landsorganisationen i
Denmark - in abbreviated form - 10.
The year after the foundation of the 10 it
came into a struggle with the employers.
The start of the dispute was a local
'4
- 87 -
The Employers' Confederation intervened by effectstrike of 300-400 workers.
Thirty thousand workers were locked out and another 10,000 lost
ing a lockout.
After four months the outcome was an agreement which not
their employment.
only settled the problems then at issue but laid down a number of basis rules
concerning future relations between the two parties, rules which through more
than half a century of usage formed the backbone of the Danish system of indusThe document was called the "September Agreement" as the
trial relations.
event took place in September 1899.
From an international point of view the September Agreement is note20.
worthy because the two parties had succeeded, without government interference,
The agreement
in establishing a proper legal basis for industrial disputes.
meant the official recognition of trade unions as equal in status with the
employers.
Aims and Activities of the Danish Federation of Trade Unions
In the constitution of the DO its aims and activities are defined as
21.
follows:
"To unite the trade union organisations of the country in a co-operatipn to
protect the interests of the wage earners in the labour market and in the
economic life and to work for social and economic democracy, including the
nationalisation of enterprises and industries of vital social importance."
22.
In pursuing these aims the DO will, for instance:
provide support to member organisations in cases where employers try to
prevent organisational work or the attempts of wage earners to improve
their conditions of work;
provide compulsory mutual support in the case of a strike or a lockout;
assist member organisations in cases before the Labour Court;
support efforts to form trade unions where they do not exist;
maintain and develop international relations with the free trade union
organisations of other countries and promote mutual support between them;
co-operate with and support other related free and democratic organisations, including the cc-operative movement and in collaboration with the
Social Democratic Party promote the social legislation which is of
interest to the wage earner.
Structure of the Trade Unions and the DO
The Danish trade union movement is based on national unions and local
The basic unit at the place of work is the union club which is the
direct link between the individual member and the movement as a whole.
At the
places at work the different categories of workers often have their own clubs
to safeguard their interests in relation to the employer.
If several categories of workers are employed at the same working place a joint club is set up
to deal with matters of common interest.
The local unions cover all organised
workers of the same category.
In practically all towns the local trade unions
form trades councils to deal with local matters of common interest.
The local
union in turn forms part of a larger unit - the national trade union.
A
national trade union covers the organised workers of a particular trade or
industry on a nation-wide basis.
In general the national union deals with
matters relating to conclusion of new national collective agreements and amendment of existing agreements.
23.
unions.
Before negotiations on collective agreements are to take place the
24.
national unions decide on the demands to put forward and also on the tactics to
be followed.
It is a fundamental principle of the Danish trade unions that the
25.
officers are elected at free and equal elections,whether on the level of the
club, the joint club, the local unions, the national union or the DO.
- 88 -
There a number of national unions have their members or part of them
employed in the same industry they often work together in a cartel organisation.
For example, the Central Organisation of the Engineering Workers, a cartel
organisation with more than 150,000 members from more than twenty national
unions, negotiates with the Association of Engineering Employers on collective
agreements in the metal industry.
It is composed of
The Congress is the highest authority of the 10.
the executives of all the affiliated national unions, one representative of each
individually affiliated union, and one representative of each trades council and
representatives for the co-operative union and the Social Democratic Party.
The ordinary Congress elects the executive board consisting of the president,
the vice-president, the required number of secretaries, the treasurer and fourThe Social Democratic Party is represented in the executive
teen membexs.
Between the Congresses the General Council is
board with two representatives.
It is composed of the executive board and
the highest decision-making body.
representatives of the affiliated organisations on the basis of one representative for each 2,000 members.
Industrial Relations
The already mentioned September Agreement of 1899 concluded between
the 10 and the Employers' Confederation laid down the fundamental rights and
It recognised the right
obligations of the two parties at the labour market.
to organise and the trade unions as equal partners witli the employers.
This
agreement was for 61 years the basis for Danish indstria1 relations.
In 1960 the two parties revised and modernised the agreement - now
called the Main Agreement - and the next year the two parties will negotiate in
order to revise the Main Agreement again.
It is noteworthy that the September
Agreement and later on the Main Agreement was concluded by the two parties at
the labour market and not through legislation.
Some of its most important provisions may be summarised as follows:
-
obligation not to obstruct workers and employers from organising within the
framework of the central organisations;
-
rules for stoppages of work, sympathetic strikes and lockouts;
-
provision to the effect that collective agreements should aim at wage system designed to promote productivity;
-
provision regarding the desirability of inserting shop steward rules in
collective agreements.
Conflicts of Interests
The collective agreements on wages and working conditions are the
backbone of employer/worker conditions.
The central organisations shall
select the general demands, i.e. the demands which may be expected to affect all
the agreements or the greater part of them.
After that the national unions
negotiate the demands which are of special interest to their particular trades,
while the central organisations negotiate the general demands.
The central
organisations shall endeavour to fix an over-all amount and settle the demands
within the limits of this amount.
If they fail to reach an agreement about the
over-all amount the Conciliation Board, which is a government institution,shall
be requested to mediate between the parties.
If agreement through the mediation of the Conciliation Board has not been reached within the time limit prescribed the Conciliation Board shall be requested to elaborate a draft settlement of the problems affecting the whole labour market.
The draft settlement
elaborated by the Conciliation Board shall be submitted either to a direct
ballot vote among the members or to vote in competent bodies.
Conflicts of law
One problem which often arises is the interpretation of agreements and
when the agreements are violated there is a well-developed system applying both
to disputes of interpretation and to alleged breaches of agreements.
In case
of a dispute about the tuterpretation of an agreement provision arises between
the two parties.
The matter may be referred to an industrial arbitration
- 89 -
committee, composed of two representatives from each side and an impartial
This committee makes a decision which is binding upon the two parties.
umpire.
In case of violation of the agreements an initial attempt is made to
settle the dispute by direct mediation between the parties concerned, for inIf the two
stance, the local trade union and the employers' association.
parties fail to agree the matter is referred to the central organisations on the
If this fails the case will be carried to the Labour Court,
labour market.
The procedure before the Labour Court is
which is a court established by law.
the same as that before the ordinaxy courts hearing, examination of witnesses,
The court is composed of six judges and one president.
The president is
etc.
elected among judges normally from the Supreme Court of Judicature, three members of the Labour Court are appointed by the LO and three others by the
The Labour Court deals exclusively with matters
Employers' Confederation.
It may conclude a case by awarding a comrelating to collective agreements.
pensation or payment of amounts due or by imposing a fine.
Its rulings are
final.
The Shop Steward System
The shop stewards workerst representatives are elected by the union club
The shop stewards act as intermediary between workers,
at the place of work.
management and the union.
Shop stewards are strongly protected against unjustified dismissals, and employers have to prove that there are compelling
reasons for a dismissal.
Shop stewards will always be active trade union members and will therefore be an important link between the members andthe union.
Joint Consultative Committees
While the contact between workers and employers regarding the daily
problems of wages and working conditions in the individual enterprise is handled
by the shop steward institution, an agreement was concluded in 1947 providing
for the so-called joint consultative committees.
This agreement has just been
revised again in September this year.
The aim of the joint consultative committees is to promote objective co-operation in the enterprises.
It is the
hope of the trade unions that the mentioned committees in the future will secure
the workers a direct influence on the decision-making in the individual enterprise.
Membership Figures
Approximately 900,000 wage earners are members of the sixty national
unions affiliated to the La.
This means that about 80 per cent of the wage
earners are organised in trade unions.
Twenty-seven per cent of the total
membership are women.
The Co-operative Movement
In order to keep the purchasing power of the wages at a high level the
trade unions are supporting an economic policy aiming at price stability.
Moreover, the trade unions can further effective competition by establishing cooperative enterprises which will keep the prices at a reasonable level.
The
trade unions have participated in establishing different co-operatives as
mentioned in Reie1s paper.
The Social Democratic Party
The trade unions have never considered their role finished when they
have achieved results by bargaining with the employers.
It was from the start
realised that the wage earners also have a vital interest in influencing
legislation.
The trade unions' influence in political life is exercised through
the Social Democratic Party, and similarly the Party is represented on the
executive board of the 10.
The Party is based on individual personal membership.
The total membership is approximately 200,000.
- 90 III.
The Role of Education Inside the Danish Labour Movement
by
Willy SCHROEDER
The Historical Background
The first real organised educational work inside the labour movement
38.
was made in 1924 by the foundation of the Workers' Education Association - in
the following mentioned as ViBA.
This Association is established by TUC, the
Social Democratic Party, the Social Democratic Party's Youth Section and the
Union of Urban Co-operative Societies.
The purpose of the
A is according to its basic principles, I quote:
39.
"to spread education among the working people in Denmark".
As you see, it is a
very broad purpose, and it appears from this that WEA has no exact political task,
it is entirely based upon education and training, and in this respect WJA is a
common instrument to the above-mentioned organisations, which are all represented on the board of the WEA.
The TUC, the Social Democratic Party, the
Union of Urban Co-operative Societies and nearly all the different trade unions
are paying grants to the activities of the Association.
Throughout the country
regional WEA sections have been founded by the local worker organisations.
40.
The Association organises lectures and study groups on a wide scale
as well as a large number of evening schools, both in towns and in the country.
Elementary and practical school subjects are the most frequently taught here.
The Association is doing intensive work in the country districts, where people
of small means have often remained outside all education activities.
The book
work has been facilitated by the publication of study guides, text books and
other education material film slides.
41.
Inspired by the Danish Folk High School Movement, which has been of an
enormous importance to the farmers' intellectual and economic progress, the first
Labour High School was founded in 1910.
The syllabus of the Labour High School
differed from the syllabus of the other Folk High Schools by its content of
economic and social topics, and with its more extensive use of books and study
circles instead of lecturing.
The basic course held at this school was the
six months' winter school for young men and women from different branches of the
labour movement.
But very soon the school started to make one and two weeks'
courses in trade union problems, as well as courses for officials and assistants
in co-operative enterprises.
In 1930 the labour movement got its second high school, this one
42.
founded by the WEA and run almost by the same principles as the first labour
high school.
The third school belonging to the labour movement came into being
in 1968 founded by the TUC
43.
The activities of the high schools can be divided into two sections:
shorter or longer courses arranged by the schools themselves;
shorter courses arranged by the WEA, the Union of Urban Co-operative
Societies or the different trade unions held at the schools.
The vast demand for education and training has brought about that several of the
affiliated trade unions have built their own schools where they primaxily teach
officials and rank and file in problems more specially connected to their own
trade.
44.
It appears from this brief historical outline that the education
activities inside the Danish labour movement consist of three units:
courses arranged by the labour high schools;
courses arranged by the different organisations (trade unions
operative society);
the regional activities by WEA.
- co-
- 91 -
What does the Labour Education onsist of,
and what Role does this Education Play to
the Labour Movement as a Whole?
There is no reason for reeling off all the numbers of subjects, which
45.
are taught at the different courses, instead of that I will try to illustrate
the educational undertakings by dividing the subjects into four main groups:
this group consists of pure elementary knowledge, brushing up or approIn this group you will find
priation of new or practicalknowledge.
The question
elementary Danish, foreign languages, mathematics, etc.
has been made, why the %YEA and the high schools should arrange training
in these subjects, in which the public offers a good deal of training.
The answer to this question is, that inside the labour education every
educational need must be fulfilled, among other things because by this
way, many workers will be led into a community with other workers, and
maybe this will enable them to take an active part in the work in the
organi. sat ions
this main group consists of organisation matters, and it is evident that
If you look upon this
this group has the biggest number of subjects.
group from the student's point of view, these subjects deal with his
connection to the trade union, or to the labour movement as a whole, and
they deal with his position as a worker inside the modern industrial
society..
More especially a training programme has been made mainly for shop
stewards and union officials.
These courses run for a period of six
weeks spread over three fortnight periods.
During these periods the
students are taught fourteen different subjects, which all have in
common to make him a better spokesman for his fellow workers, and to
make him more capable in making use of the different agreements and
arrangements made with his employer.
As an example I will mention a few
of the taught subjects: trade union knowledge, psychology, economics,
general agreements, labour law, bargaining technique, social law and so
on.
Within the same group a lot of one-and two-week courses have been
made especially for leaders and offictals in the different trade unions.
Courses for leaders and assistants in co-operative undertakings have had
an advanced rank since the foundation of the Union of Urban Co-operative
Societies.
In these courses the students are dealing with the following
subjects among others:
the purpose of co-operative enterprises, problems about investments, co-operation problems, book-keeping, etc.;
this third group deals with society problems in a wider sense, covering a
wide field of different subjects from political history, local administration and social law to social psychology and pedagogical theories.
These subjects serve to illustrate the workers' position in a democratic
society;
finally there is a group of subjects consisting of literature, theatre,
art, music, which have gradually been widened, because there is a growing
understanding that it is not enough just to deal with the material problems of society.
Workers' education must bind itself also to offer a
number of subjects, which in its content can be of personal value and
enrichment to the individual participant.
46.
It is not possible to give you a total figure illustrating all the
education activities, but I think a few figures will be illustrative: in the
year 1968/69 %EA arranged 7,800 study circles with about 13,500 participants the same figures for the year 1948/49 were 3,000 study circles with 30,000
participants.
Back to the year 1968/69
besides the study circles 80 oneand two-week courses were arranged with over 3,000 participants, about 2,000
lectures with 27,000 participants, to which must be added numbers of weekend
courses, theatre and film performances, art exhibition, etc.
And when I remind
you that the above-mentioned figures only illustrate a part of the total labour
education activities - although the biggest part - you will realise the extent
and the importance of the labour education and training in Denmark.
- 92 -
Annex A
Consumers' Declaration
adopted at the Congress of "The Union of Urban Cooperative Societies in Denmark" on 20 February 1960.
47.
(i)
The co-operative enterprises which are members of "the Union of
Urban Co-operative Societies in Denmark" consider it as their
In basing their
main task to serve the consumersT interests.
constitutions and rules on the principles of co-operative and
democratic management, the member enterprises have created the
conditions necessary to achieve this purpose;
the co-operative enterprises reject the profit motive.
Investors should not receive any profit, only an interest which
should normally not exceed the interest on loans paid to the
bank;
the co-operative enterprises intend to be in keen competition
with other enterprises.
They, therefore, to the greatest
possible extent, promote rational management and effective
types of enterprises.
The co-operative enterprises believe
in sound competition and intend to fight against agreements
and monopolies tending to restrict competition and increase
No co-operative enterprise can take part in agreeprices.
ments on fixed prices, on division of markets or in similar
arrangements which prejudice the interests of the consumers or
the community;
the co-operative enterprises have bound themselves to apply
sound and reasonable terms of payment.
They are in favour of
cash payment for everyday consumers' goods.
The co-operative
enterprises accept the existence of the instalment system for
large consumers' goods, but are opposed to exploitation of the
consumers in the instalment trade.
They have bound themselves
to keep the instalment rates of interest at a reasonable level
in strict accordance with the increased costs and to inform the
consumers about the difference in costs between cash and instalment payments;
the co-operative enterprises intend to be frank with the consumers and to give them clear information.
They undertake to
participate in large-scale efforts to improve information to
the consumers in general.
They also undertake to contribute to the fulfilment of the consumers'
48.
wishes by providing detailed and easily accessible information on price,
quality, contents, durability, use, etc., where this can be done without rising
prices at the expense of other consumers.
They want to give their members and
shareholders better possibilities to judge the terms o± trade by providing
clear statements on the financial and working situation of their enterprises.
The co-operative enterprises accept the use of advertising in modern trade, but
are opposed to misleading advertising and to unreasonable and false influence on
the buyers in general.
-
93 -
Annex B
Denmark - A Case Study
Some Pacts and Figures aboutDenmark
Denmark:
Situated in
A small country - 5 million inhabitants, 45 000 km.2
Raher mild climate, very
the northern temperate zone of Europe.
No special raw materials.
flat landscape, good soil.
Population: 5 million in total.
of which:
Active part (ages 15-74)
3.6
million
Employers and self-employed
Wives engaged in husbands'
enterprises
Civil servants and salaried
workers
Skilled workers
Unskilled workers
0.4 million
Total in the trades
Housewives
Children and students
Pensioners
2.3
million
0.6
tI
0.3
"
0.1
It
0.8
It
0.3
tt
0.7
II
0.4
Total:
3.6 million
(1 Danish Crown = about 1 shilling)
billion D. crowns
Gross National Product:
114
GNP (1969)
+ import
33
147
- export
31
116
At disposal at home
of which:
Public consumption
Private
Public investments
Private
19
65
84
9
23
32
Investment in % of GI\1T: 28%
Yearly growth in GNP (fixed prices) 1955-65: 4.$
of which due to increased employment
1.2%
productivity 3.6% 4.8%
116
- 94 Annex B (cont.)
Breakdown of GNP on trades:
In per cent of G-NP
8.9
21.1
Agriculture and. other primary trades
Industry
9.3
Handicraft
Commerce
9.5
16.4
Transport
10.0
Public Services
14.7
Other Services
10.1
Building and Construction
100.0
Total:
Wages:
Average for all workers, July
Working hours per week:
1969:
13.44
Until September
D. crowns per hour.
1970:
Prom
Holidays (minimum):
:
41 1/2
40 3/4
hour
u
3 weeks.
Real wages per hour increased with 71% from
Working hours were reduced from 45 to
41 1/2
1957-68.
hour in the same period.
GNP (in fixed prices) increased with 68% in the same period.
Unemployment:
1969:
3.9%
General level in
I?
Note:
"
l950s: 8-10%
l96Os:
2-4%
The uiemployment figures cover only insured workers, as the
not-insured workers are mostly salaried workers and civil servants etc.
The unemployment f.'ure for the whole labour force
should be about the half of the figures registered.
I
- 95 Common Interests and Relations Between
Trade Unions and 00-operatives
and the Role of Government
Introductin
SinRapore as a Case Study
by
0.V. DEVAN NAIR
Secretary-General of the
Singapore National Trades Union Congress
1.
To introduce Singapore as a case study on the subject of trade unions
and co-operatives and the rcle of government has fallen to my lot.
As any
doctor will tell you, case studies are useful, among other things, for two
reasons:
to determine the kind of treatment that may be applied to patients
suffering from similar or related ailments; and also
to determine the kind of treatment that should be avoided in respect of
other patients, if they are to survive and prosper.
I do not pretend that we in Singapore have ideal solutions which may be applied
to other situations.
2.
We have, however, gone through in. the last year, a period of intense
discussion and debate on the subject of trade unions and co-operatives.
As a
result, we have embarked on a series of projects which have, as their ultimate
aim and objective, the creation of what we call a workers' co-operative
commonwealth in the Republic, which will form the base of the economic strength
and social influence, status and power of the trade union movement.
An honest assessment of the prevailing situation with regard to trade
3.
unions and co-operatives must be the necessary pre-condition for tle formulation
of new concepts and programmes.
We therefore started off with a very critical
survey of the existing situation, and the results were hardly complimentary to
the attitudes and concepts we had entertained for so long.
4.
I hope to share with you, in this paper, some of our basic thoughts on
the subject, and the whys and wherefores of the concluEions we arrived at.
What
5. We may begin by trying to answer the following question.
considerations prompted the trade union movement in Singapore to promote the
establishment of co-operatives in a big way?
6. A group of trade union leaders got together in September 1969, because
they wera concerned by the declining meribership of trade unions in the Republic
The social and political influence of organised labour in the
since 1965.
affairs of the Republic had also steadily declined during the same period.
3
For in the last few years,
7. We found we were not alone in tbis decline.
in several parts of Asia, there appeared to have been an inexorable decline of
what little trade union power and influence did exist.
In some cases, even our
very right to exist and function has been steadily eroded.
8.
What was the reason, we asked ourse]ves, for this decline?
For we all
know that in. the great days of the national independence struggles of the
pre-colonial era, trade unions provided one of the major focuses of national
independence movements, and enjoyed a degree of influence and prestige, out of
all proportion to their actual numbers.
- 96 -
Political leaders and others vied with each other to found a trade
union base for their activities.
Gandhi led a big textile strike in India.
Nehru was once or twice elected the President of the Indian National Trade
Union Congress.
krumah and Nyerere, Torn Mboya and Lee Kuan Yew, and several
others, had their earliest days in the trade union movement.
But today, on the other hand, several years after political
independence, trade unions do not enjoy anywhere near the same kind of national
influence, recognition, status or prestige.
Political ].eaders do not credit the trade unions with the same importance
Graduates
they undoubtedly possessed in their eyes in pre-independence days.
and undergraduates no longer fall over each other trying to be of service to the
Rather, they look for good career prospects in the public or
trade unions.
Why has all this happened?
private sector.
The first temptaticn, of course, is to weep and bewail our lot, curse
the authorities and politicians for having let us down, indulge ir.. an orgy of
self-pity, and end up by calling yet another general meeting or delegates'
conference in order to pass passicuate resolutions to denounce everybody else
for the poverty of our current situation.
In any case, we
We decided, however, not to take that easy way out.
15.
had done little else over the last few years, apart from passing resolutions,
but with little or nothing to show by way of concrete results.
Not that the politicians and the powers-that-be were or are immune
But
Their sins of onission and commission are far from few.
from criticism.
we decided that, fcr a change, we might legin more fruitfully by a rigorous
Leave everybody else aside for the moment, and let
exercise in self-criticism.
us start by dissecting ourselves, by an analysis of cur motivations and
A cold, hard and absolutely pitiless look at ourselves and our
inadequacies.
surrounding circumstances was, we felt,what was primarily called for.
What had gone wrong with organised labour, between the pre-independence
days of heady and euphoric pre-erainence, and the post independence days of growing
Where, how, when and why did we take the
disillusionment and disenchantment?
wrong turning? And lastly, where do we go from here? Where to and how?
The survey we conducted was
Our pretensions and presumptions, our
all the posturin.g and attitudinising
the hard facts of life in the context
retreats from reality.
no doubt shattering to our self-esteem.
flamboyant speech-making and sloganising,
were seen for what they were - evasions of
of the modernisation of our society,
Carried away by our own windy verbiage, we had neglected the only real
basis of social power, status and influence - the cultivation of and economic
base and the building up of a sufficiency of human and financial resources to
sustain and advance the aspirations ci' the working population for a better life.
In the days of the anti-colonial struggle for independence, we had
proudly offered ourselves as the natural vehicles and instruments of the fight
for national emancipation, and had thereby acquired a national significance out
of all proportion to our actual numbers or to our intrinsic capacities.
But after independence, when the elected representatives of the people
And worse, we retreated into a
took charge, we chose to rest on our laurels.
institutions
We regarded ourselves as purely bargainil
sectional isolation.
and no more.
The prevailing concept then was that trade unions were solely and
exclusively militant vehicles of an entirely self-centred sectionalism, divorced
from the large and vital social, economic and political issues with which the rest
But even militancy, if it is to be effective, must
of society had to grapple.
Organised labour in Singapore, like
needs be nourished by the sap of power.
trade unions in several other parts of the developing world had, by and large,
woefully failed to lay for themselves the economic foundations of real social
We
power and influence, or even to appreciate the need for such foundations.
chose to build our houses on shifting sands, and not on firm rock. Time passed
And so did opportunities for renewal and regeneration.
by.
- 97 -
Union subscriptions and affiliation
Trade union membership declined.
The national centre did not have any bank balance to
fees were absurdly low.
speak of, and we did not have any stake in the economy of the Republic.
We remained stationary and stagnant in the context of rapid changes
Powerful modernising influences were at work everywhere in our society.
in. the economy, in. education, in the social services, in banking, industry and
In all this bustle o± economic transformation and social change
commerce.
taking place before our very eyes, we tended to retreat into an increasing
As I said somewhere else, more and more we sounded and
sectional isolation.
acted, in the Singapore context, like a bunch of economic bankrupts trying to
gate-crash into a meeting of shareholders.
But in what direction,
We had to change, and no doubt about it
These were the next
to What purpose, and with what possibility of success?
questions we tackled.
We looked at examples of the more developed labour movements in the
In. particular, we looked at the labour movements of the Scandinavian
world.
And we found firmly entrenched labour
countries, West Germany and Israel.
organisations, which were closely associated with, or directly ran, as in Israel,
their own workers' banks, workers' co-operative insurance societies, producer
co-operatives, consumer co-operatives, and even directly owned commercial and
In the process, organised labour
industrial undertakings of various kinds.
in these countries had acquired, not only a powerful stake in the economy of
their respective countries which no politician, whether of the right, the
but also a wealth of financial
centre, or the left, could safely ignore;
expertise, business skills, and administrative know-how, which had made of the
labour movements in these countries key participants as well as major
The working
beneficiaries of economic development and technological change.
population benefited immensely, in terms of lower consumer costs, secure housing,
improved social, recreational and educational facilities, and all the intangible
but very real spiritual beneits of co-operation.
The developed trade unions of the West have by no means, it must be
remarked, given up their primary function of collective bargaining for improved
On the contrary, they
terms and conditions of employment for their members.
have jealously guarded this primary function without which a trade union ceases
In fact, because of the vast financial and human resources
to be a trade union.
at their disposal, collective bargaining is conducted on the basis of a greater
capacity and strength, which must be the envy of those of us in the developing
world.
We then decided to make a beginning ourselves towards the creation of
But one big obstacle had first to
a sound economic base for our trade unions.
How were we to communicate with our affiliated trade unions and
be cleared.
their rank and file members, and persuade them to accept new lines of thought
and action - which would involve the discarding of old and long-established
Trade union morale was at its
concepts, prejudices and instinctive responses?
We realised that we would have
lowest, and all this was easier said than done.
to embark on a huge and unprecedented educational endeavour.
This was the seed which sprouted iii November 1969 in the epoch-hiaking
Involving an enormous
seminar on "The Modernisation of the Labour Movement".
amount of organisation, and given considerable publicity in the local press, a
series of brutally frank working papers on all aspects of the trade union
situation in the Republic were prepared, in all the four official languages of
the state - Malay, English, Ohinese, Tamil - with the advice and assistance of
Hitherto moribund
some highly-qualified men sympathetic to the cause of laboun.
trade unions were lashed into an unprecedented intellectual activity, and
wide-ranging discussions took place in affiliated unions on the working papers.
All these separate discussions culminated in the practically unanimous
recommendations of the modernisation seminar, ranging over a whole lot of issues of
I may mention just a few of these issues:
concern to the trade unions.
restructuring of trade unions;
upward revision of union dues and affiliation fees;
anomalies and restrictions in current employment legislation;
- 98 -
social and political options of organised labour in the Singapore context;
-o
education of leadership in the trade unions;
workerst participation in management and the promotion of joint
consultation and, most important of all;
the establishment of a co-operative commonwealth for the workers in
Singapore.
28.
Other recommendations were also made, too numerous to mention here,
but all of which are recorded in the publication Why Labour Must Go Modern".
29.
I will concentrate however on the line of approach we took in regard to
the establishment of co-operatives.
On this subject, a strategy for growth was
suggested by Dr. Goh Keng Swee, our Minister for Defence, in a key paper he
presented to the seminar, which was extremely well-received by the trade union
delegates.
30.
Let me list some of the principles advanced by Dr. Goh, in his own
words, for the consideration of the trade union delegates at the seminar. I quote:
"(i)
the first principle is that a co-operative must be fully
competitive with private enterprise.
It cannot expect
privileged treatment by the Government.
We want sturdy
co-operative units and extension of preferences to the
movement will result in weak economic structures and not
robust growth.
The labour movement must find the money
itself without any financial assistance from the Government;
the second principle, which derives logically from the first,
is that the labour movement should engage in co-operative
enterprises in those fields in which it had a natural
built-up advantage.
In so doing, it would be easier for
the co-operatives to compete successfully with private
enterprise4
the third principle is that the highest standards of
integrity must be established and inaintained.
This
would imply, in our state of development, that there must
be one central authority which supervises co-operative
enterprises launched by trade unions and will have the
power to take remedial action where weaknesses in this
respect are detected.
Such authority, I believe,
rightly belongs to the NTUO
the fourth principle is that the co-operative must have
effective management.
Whatever type of co-operative you
decide to establish, whether it fails or whether it succeeds
depends as much on one factor alone as on all the others
combined.
And this is the factor of management.
If you
have good, keen, effective management, then any kind of
co-operatives that you establish will succeed.
On the
other hand, if you have a lazy, fumbling, ignorant,
indecisive kind of management, even the most promising
project will fall apart in your hands.
31.
The first principle is that the staff of the co-operative,
be it the top executive or the general run of employees, should be
recruited entirely on the basis of merit.
The co-operative should
not be made the dumping ground of loyal and aged union members who
are tired of their present employment and believe that they deserve
a more congenial occupation at better rates of pay.
Nor should
appointments and promotions to any position in. the co-operative be
subject to political pressures or influence.
Merit and performance
must be the only criteria.
Staff recruited on unsound principles
cannot be properly disciplined and trained.
Favouritism, intrigue
and eventually complete demoralisation will set in and reduce the
organisation to a moribund condition.
- 99 -
The second principle to be observed is that while it is proper
that the professional staff of the co-operative be held responsible
to a committee, board of directors or whatever the governing body
be called, it should be given considerable scope for the exercise
The committee or board
of initiative, judgment and enterprise.
should not interfere in the day-to-day management of the
Its duty is one of laying down policies and guideco-operative.
lines and general supervision of affairs of the co-operative.t'
These words, coming from the chief architect of Singapore's
unparalleled economic success, and one of the hard-headed thinkers in this part
of the world, went home in a pretty big way to the audience at the seminar.
Dr. Goh went on to propose a strategy of development, which would
Let me,
ensure successful and rapid growth of the co-operative movement.
again, quote Dr. Goh in his own words, as follows:
"Just as we have to develop industries in a hurry, so must we achieve
as much, in co-operative development, in years as in others took
decades.
One possibility of building the financial base could be to start a
I
co-operative bank or a workers' bank or something like that.
People will not have confidence
would, 'however, advise against this.
in the bank, unless they have confidence in. those who are starting it.
Unless the co-operative movement has already behind it a string of
successful enterprises, it is unlikely that people will put money in
a co-operative bank, except perhaps the small group of loyal and
faithful members.. Regrettably these are seldom people of
substantial means.
I suggest that the financial base could be built upon a life
The insurance co-operative should not,
insurance co-operative.
at any rate in the initial stages, move into other fields of
insurance such as fire, marine, motor and general insurance.
There is no advantage that a co-operative enterprise enjoys in these
It is otherwise in respect of life
fields over private enterprise.
insurance.
To the labour movement as a whole, a co-operative life insurance
For instance, if no
enterprise would provide a good financial base.
more than a quarter of trade union registered members took up policies
with premiums averaging, say, $150 a year, this will mean a cash flow
With an annual cash flow of $5 million,
of some $5 million a year.
it should be possible to accumulate a fund of a respectable size
Of course, there is no reason why actual
within a few years.
performance could not be considerably better than $5 million a year.
The potential market is not restricted to union members; it can
extend to all employees as well as the small businessman, hawkers
The
and taxi drivers and others who work on their own account.
outcome depends largely on the intensity of intelligent effort put in."
3L..
Apart from what Dr. Goh said, it became evident to everybody that a
co-operative insurance society was a natural first choice, as it would have
certain built-in advantages over commercial insurance, as follows:
collection costs would be minimal, as premiums would be collected
through a check-off system.
Lapse rates of insurance policies taken
out would, therefore, be very low;
a co-operative society would be exempt from the 40 per cent income tax
commercial enterprises are liable to;
"
-'
all this would enable the society tO issue low premium life policies
well within the reach of the lower income groups, who are at the moment
entirely without insurance cover of any kind.
- 100 -
The other types of co-operatives suggested by Dr. Goh, in their order
of priority were:
Oonsumer co-operatives
Housing co-operatives
Producer co-operatives, and finally
A co-operative bank.
Next, some of our conclusions on the form and structure that our
co-operative commonwealth should take, and their relations with the trade unions.
Here again, a brief international survey helped us to make up our minds.
In some countries, as in Israel, co-operatives and trade unions are
in fact organic parts of a common labour movement, like the Histadrut.
As a
result the financial and human resources of the trade union and co-operative
components go to enrich the resources and the social capacity and influence
of the common labour movement.
In many Asian countries, however, there is no broadly-based labour
movement, inclusive of both the trade union and the co-operative sectors.
On
the contrary, trade unions and co-operatives tend to be completely and
institutionally divorced from each other, and thereby fragnient the resources and
capacities of the organised working population.
In. some unfortunate cases,
mutual rivalry and hostility has also been allowed to develop.
Relations between trade unions and co-operatives can be of two kinds:
(1)
(ii)
a loose ad hoc association of the separate organisations, as exist in
some Asian countries, to provide opportunities for discussions with a
view to formulating common programmes for the benefit of the working
population.
But such loose association has the disadvantage that both
sectors remain as organically separate social institutions; and
affiliation to a. common national centre.
We decided that we would prefer to develop Our co-operative commonwealth as an organic part of a common labour movement.
What then, it may be
asked, about the existing co-operative societies in the Republic, most of which
are of the thrift and loan variety?
Well, it is not possible for the trade
unions, either to dissolve them or to take them over.
Many of them are
performir.g useful functions.
In order to ensure closer ties between existing co-operatives and the
trade union movement, we have decided to offer existing co-operatives
opportunities to invest their surplus funds in the NTUO's co-operative ventures.
Many of these co-operatives are now shareholders in INCOME, the co-operative
insurance society we have established.
Further, by an amendment to our constitution, we have also made it
possible for existing co-operative societies to join as associate members of
the NTUO.
In these ways we hope to bridge the institutional gaps which have so
far tended to divide the trade unIons and the existing co-operatives, even
though they serve the same workers, albeit in different ways.
The co-operative societies we plan, like INCOME, the insurance society,
already established, or COMFORT, the name we have given to our transport
co-operative, now in the process of registration, or WELCOME, the consumer
co-operative which will take shape before April next year, will have some
constitutional features which are probably unique.
The NTUC, as an institution, is the founder member of INCO]IIE, for
Our affiliated trade unions, as well as several of the existing
co-operative societies, are institutional members.
Then we have individual
shareholders, mostly trade union members.
Finally, every person who takes out
one of INCOME's policies, will also be a member of the society.
example.
- 101 -
This structural pattern will be generally followed in respect of all
our other co-operative ventures.
Considerable public interest and, if I may say so, public confidence,
has been generated with regard to INCOME, for we have managed to persuade
Dr. Goh Keng Swee himself to preside as Chairman of our Board of Trustees.
and for General Manager, we have managed to secure the expert services of the most
Also coming soon to
experienced actuary in ihe Republic, Mr. A.T. Shiinpi.
assist INCOME will be a co-operative insurance expert from FOLKSAM, in Sweden.
So you see, we have gone about establishing our co-operative
For if we suffered any
commonwealth in a very careful and thorough fashion.
serious setback in our plans, through inefficiency, or poor organisation and
planning, or weak management, the labour movement would never be able to recover
for a very long time to come.
While the Government
One last word about the role of the Government.
has proved sympathetic to our aspirations, we have been told and, I believe quite
rightly, that we should not expect any privileged treatment, or feather-bedding
I may quote Dr. Goh Keng Swee again in this connections
of any kind.
It
has not been and will uot be the polic7 of the Government to
This
single out individual enterprises for favoured treatment.
also applies to co-operative ventures which the labour movement may
sponsor in future."
To quote Mr. Goh again:
"The
launching
assist in
technical
principal
Government, while it cannot extend direct financial assistance in
any of these co-operative eiiterprises, would be willing to
whatever ways it can, such as for instance, in giving
But the
assistance in the formation of the co-operatives.
task must be faced by the trade union movement itself."
I hope I have been able to give you some rough idea ci' the kind ol'
situation we in the trade union movement in Singapore are trying to grapple with,
the kind of thinking we have applied to our problems, and some of the solutions
we have decided upon.
I hope that this presentation of Singapore as a case study will prove
to have been of some interest to you, and will be at least a modest contribution
to the deliberations of the seminar.
- 102 -
APPE)IDIX V
Group Reports
Group A
Delegates present:
Ceylon
Fiji
Singapore
3
1
3)
Group Adviser:
John SVEB1INGSEN
The following were elected:
Chairman:
Alternate Chairman:
Rapporteur:
A.P. Maharaj
R.G.G.0. Gunasekera
1.0. Baptist
(Fiji)
(Ceylon)
Discussions (1st Session)
1.
It was agreed that each country in the group gave its background of trade
unions and co-operatives, touching especially on membership and capital before
analysing the situation in the countries for any possibilities of collaboration
between the two movements for the benefit of their workers and society as a
whole.
The main points were listed as follows:
(a)
Ceylon
inter-relation between co-operatives and trade unions is limited to
common membership;
a multiplicity of trade unions exist;
trade unions run, independently, welfare activities, e.g. credit
schemes, mutual death and retirement benefits, canteens, etc.;
the Ceylon co-operatives contribute towards an education fund and
trade unions run education at institutional level;
there is an apex for the co-operatives only;
trade union membership is more urban except in the plantation areas;
at the moment the State has accepted a plan for the revitalisation
and reorganisation of the co-operative movement.
It is proposed to
reduce the share capital from 50 rupees to 1 rupee, which would
entitle a member to participate fully in the affairs of the society.
However, if a member requires credit facilities, he may have to buy
an additional number of shares according to the limitations made by
the by-laws.
A major change in the country will be a scheme for
the amalgamation of small co-operative units into large economically
viable units thereby intensifying the capital.
When co-operatives
collaborate with Government in common ventures, capital is provided
for by the People's Bank of Ceylon as loans on preferential terms;
(b)
Pii
(1)
there is a differentiation between rural and urban co-operatives;
the total number of co-operatives is 960;
the trade union is in its infancy - 5 years old;
an apex does not exist in both the organisations;
individual membership exists for both co-operatives and trade unions
in the urban areas.
There are two trade unions in rural areas,
only farmers' associations exist;
- 103 -
the farmers are an integral part of the community but lack funds;
there is also this consumer problem and the grave problem of
indebtedness;
recent amendment to the legislation has made it possible for members
of agricultural co-operatives to assign up to P$40.- per annum
towards the purchase of shares in their respective co-operatives as
a first charge from the proceeds of their produce even if a prior
charge exists on the proceeds;
(a)
Singapore
the trade unions and co-operatives are collaborating, e.g. INC0/t,
where the co-operatives are institutional members;
there is restrictive legislation with regard to the utilisation of
funds, thus preventing co-operatives from diversifying their cooperative business ventures;
The
there is an apex for both trade unions and the co-operatives.
trade unions when they formed INC0MF included ordinary (individual)
membership, institutional membership for the co-operatives and
affiliated trade unions and founder membership, the NTUC;
the capital is in the hands of both organisations, but the trade
unions wanted more capital and are achieving this by raising union
dues, part of which will be used to finance co-operative ventures.
2.
Conclusion
The group, in their discussions, observed that there were certain factors
which retarded collaboration between trade unions and co-operatives and have
come up with the following suggestions which could be used by the countries
represented in the group and society as a whole.
General
restrictive co-operative legislation should be removed for effective
utilisation of funds by the trade unions and co-operatives in multipurpose co-operative ventures;
there should be the education of members, with regard to trade
unions and co-operatives, on a common training programme;
there should be a drive to increase membership in both organisations;
employers be made to contribute towards the education funds for
trade unions and co-operatives.
Ceylon
there would be a common fund or a common education programme
financed by the two movements;
the unions could collaborate with the co-operatives by negotiating
on their behalf and pressing for a check-off system which is
presently enjoyed only by the trade unions;
where many ventures are of government monopoly e.g. insurance, transport, building, etc., the trade unions and co-operatives could press
jointly for considerations to operate in these fields;
establishment of multi-purpose co-operative societies in workplaces
should be sponsored so that the wage earners could beiefit from the
cc-operative formula in meeting his consumer, welfare and credit
needs;
- 104 -
Singapore
(i)
there could be a joint council set up to co-ordinate the two organisations, so as to encourage a better understanding, for their mutual
benefit.
The joint council would also encourage the formation of
new co-operatives and business enterprises and jointly arrange
educational programmes.
Fiji
there could be brought in some kind of legislation to bring about
This sphere has not been probed into and
institutional membership.
appears a most likely avenue;
there could be possible collaboration between rural and urban cooperatives in the first instance before collaboration between trade
unions and co-operatives could be achieved.
3.
Discussions (2nd Session)
The groups discussed the following:
(a)
How Decision-Making Can be Made
More Efficient
It was generally agreed that:
all ventures had to start from the "grass roots level" with the meinbers having a democratic say, followed by feasibility studies by both
trade unions and co-operatives who are to seek experienced and expert advice.
This would follow the following lines:
planning,
analysis, proposals, evaluation and finally the final project;
elected members make the policies approved by the members but are
carried out by the general manager who would be the chief executive
and his staff;
ventures could be wherever possible at national level.
(b)
How Conflicts of Interest Shall be
Treated
It was agreed that:
the government financial assistance may be sought wherever considered necessary in major projects like having co-operative ventures embarked upon by collaboration between trade unions and cooperatives;
co-operatives and trade unions could collaborate to alleviate conflicts with the Government regarding social matters, taxation, etc.
(c)
What are the Most Feasible Co-operatives
for the Particular Country There Trade
Unions and Co-operatives Can Collaborate?
Feasibility in order are as follows:
Education
Welfare and credit
Consumer
Housing
Insurance
and any other that may prove relevant to the countries.
- l0
-
Group B
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
A. Das
D.G. Phatak
R.N. Rao
C.S. Rao
A. Adhar
M. Diponegoro
M. Arief
Mr. M. Kobaysahi
Mr. A. Nagamatsu
Group Adviser:
India
India
Indie
India
md one sia
md one sia
md one sia
(Japan
(Japan
Mr. J.J.
vre of 110
The representatives of the three participating countries acted as chairman
Mr. A. Das of India acted as the rapporteur.
by rotation.
Measures to Strengthen Co-operation Between
Trade Union and Co-operatives
The basic objectives of trade union as well as co-operative movements are
protection of the interests of the common man with limited means against exploitation by intermediaries and privileged classes, and advancement of their
economic and social interests inculcating in them a spirit of camaraderie, selfThe
heJ,p and voluntary action for advancing their common economic interests.
trade union as well as the co-operative movements both serve as the training
grounds for the development of initiative,responsibility and democratic operaThe group after considering the situation now e<isting in the countries
tions.
of their region, namely Japan, India and Indonesia, feels that collaboration
between trade unions and co-operatives can be strengthened through the following
measure s:
Joint Consultative Machinery and
Joint Research and Survey Units
The joint consultative machinery consisting of the representatives of both
trade union as well as co-operative movements, at the national level, may provide a suitable fori.m for discussing the common problems and needs of industrial
workers who are members of trade unions as well as co-operative institutions.
This standing body may meet and make suggestions to the national government from
time to time about policies and programmes which, in its opinion, may conduce to
Thile this
the advancement of the social and economic interests of the workers.
body may concentrate its attention on broa4 policies and programmes, after such
progremmes are accepted by the national government, the joint research survey
team consisting of the representatives of trade unions and as well as the cooperatives may undertake survey of the particular areas of development and work
out details about the projects to be implemented, keeping in view the needs and
This team may be set up as and
requirements of the local industrial workers.
when necessary.
Organisational Collaboration
Trade unions may take initiative in promoting co-operative endeavour among
industrial workers by sponsoring the establishment of co-operative societies in
industrial areas and by inculcating among them the economic benefits that would
Beside's taking such promotional action,
accrue from such corporative effort.
the trade unions may, where favourable conditions exist, directly participate in
This is expected to bring
co-operative organisal4ons as institutional members
about, on the one hand, direct involvement of the trade unions in the successful
working of co-operatives of industrial workers and, on the other, strengthen the
share capital structure of the co-operatives by keeping the membership fee of
It is,
institutional members at a higher level than that of individual members.
howeirer, emphasised that the separate independent identity of co-operatives and
trade unions has to be retained and each should be allowed to function in
accordance with their own principles, without one being subservient to the other.
- 106 -
Financial Collaboration
There may be adoption of check-off system in respect of trade unions and
co-operative dues by deducting at source, at the level of trade unions, 00operatives and employers.
This may be done with the mutual agreement of the
parties concerned, with permissive legislation, where necessary.
The trade
unions can also provide necessary guarantee for the loans extended to their members by the co-operatives.
As regards direct participation between trade
unions and co-operatives, one of the countries represented in the group namely
Japan, has the concrete example of such collaboration in the shape of laiour
banks set up under the Labour Bank Act of 1953.
So far forty-six labour banks,
promoted by the Central Council of Labour Welfare, have been set up, covering
every prefecture in Japan.
The main sources of the labour banks' deposits are
personal savings of the individual workers of the affiliated organisations
(48 per cent of the total deposits), operational funds of member organisations,
that is, trade unions, consumer co-operatives, etc., (29 per cent), obligatory
savings of trade union members in the shape of mutual aid funds (23 per cent).
The labour bank in a prefecture includes every industry of the area regardless
of the political complexion of the trade unions.
Advance of loans from the
labour banks is made to the members for providing them with housing, for meeting
their personal and social needs and also towards working capital of consumer and
other co-operatives of the workers.
Japan. has thus set up a concrete example
of effective financial collaboration between trade unions and co-operatives with
remarkable benefits to the members.
The conference may consider to what extent
and with what modifications similar financial collaboration between trade unions
and co-operatives could be brought about in other countries of the Asian region.
Functional Collaboration
The joint research and survey teams of trade unions and co-operatives
suggested earlier could work out the actual manner in which co-operative endeavour can be organised among industrial workers in different areas, after
detailed local survey.
Experience has, however, shown that functional collaboration between trade unions and co-operatives may be particularly fruitful
in promoting and organising housing co-operatives, labour contract and construction co-operatives, consumer co-operatives, thrift and loan co-operatives
and industrial (producer) co-operatives.
Educational Collaboration
There is pressing need and immense possibilities of joint action between
trade unions and co-operatives in the field of training of office bearers and
education of the members of both the organisations.
The training programmes
and curricula evolved for various officials of the trade unions and co-operatives
should reflect the general principles, existing policies and programmes of both
the movements and adequate provision should be made for special lectures, seminars and discussions, through audio-visual aids and other means, to which
representatives of both the movements may be invited at international, national
and base levels.
Group C
Participants:
Chairman:
Malaysia (2
Pakistan (4
Papua/New Guinea (1)
Mr. G.D. Collins (Papua/New Guinea)
Rapporteur:
Mr. Ali (Pakistan)
Group Adviser: Mr. Willy Schroeder
Contents
Problems and. analysis of current situation associated with the activities
of trade unions and co-operatives in groupts area;
proposals to alleviate the problems noted;
recommendations to permit these proposals to be carried out.
- 107 -
Introduction
The group decided that the best way to tackle the question was to have
individual delegates representing the respective countries within the group to
present a brief analysis of the general activities of trade unions and coWe felt this was essential to refresh our minds before we conoperatives.
sidered we were in a position to closely examine the complicated aspects
We would also ask that delegates when
involved in such a broad question.
examining this statement should do so in conjunction with the Country Statement
of G-roup C which was previous1i issued to all delegates to this seminar.
The group noted a startling number of similarities between our countries in
that each had separate legislation covering the formation and registration of
It is essential that delegates should note
trade unions and co-operatives.
that there has been a very real lack of collaboration between the activities of
Thus we can say in all honesty that our
trade unions and co-operatives.
countries were in need of advice and guidance as to how this situation might be
resolved and that greater co-operation between the groups should come about.
It would be of new interest to other delegates though not quite pertinent
here that minimum wage legislation does in fact exist in Papua/New guinea and
Pakistan, also that in Pakistan there is legislation enabling workers to participate in company's profits.
1.
Problems and Analysis of Current
Situation Associated with the
Activities of Trade Unions and
Co-operatives in Group's Area
Lack of Education
The group formed quite definite ideas on this particular aspect durLng our
It was quite clearly brought home that one of the main obstacles
discussions.
to both the progress of co-operatives and trade unions and subsequent collaboration between these two movements was not Llliteracy in the true sense but a lack
of knowledge on he part of members and would-be members of the aims and objec-
tives of t1ê trade u.nion,on the one hnd,nd the co-opeatives on the other.
In a situation such as this, it was apparent that very little extension work
could be achieved and both movements must suffer accordingly if the position
were not righted. These remarks, of course, should be read in conjunction with
the other problems enumerated below.
Lack of Trained Personnel
The growth of both trade unions and cc-operatives has been hindered because
of the lack of suitable trained organisers and other personnel who could be
utilised to explain the objectives and functions of trade unions and also cooperatives and ensure that there would be a steady and continual expansion in
It was felt that this could well be responsible for the existing
both fields.
Co-operation between groups must be
cleavage between unions and co-operatives.
enhanced with the growth of individual movements which in turn would lead to
collaboration.
Legislation Anomalies
area means that colThe legislation situation which exists in the group'
laboration between trade unions and co-operatives is definitely being hampered
by the legislative restrictions that are placed upon trade unions with regard to
the expenditure of union funds especially and the financial assistance which
they could perhaps render to co-operatives and vice versa.
Recommendations to Permit These
Proposals to be Carried Out
The group was firmly of the opinion that there was an urgent need for a
better utilisation of existing educational facilities whether they be government
It was considered that countries
or those associated with either movements.
should take part in tripartite discussions which would involve the drawing up of
Pinancial arrangedevelopmental plans for a particular period, say,5 years.
ments would be on tripartite lines.
- 108 -
With regard to the labour legislation difficulties being experienced it was
suggested that individual countries should examine existing legislation with
regard to restrictions on the financial activities of co-operatives between the
co-operatives and trade unions and furthermore that the existence of the 110
should be sought to recommend to member nations that a review should be carried
out on labour legislation in this regard.
It was further recommended that atrade union should be permitted to become
a primary member of a co-operative society and as such utilise its share of the
funds for projects which would be to their advantage.
One of the most vital
recommendations concerns the provision of satisfactory financial arrangements
for without this most vital need covered the extension schemes would amount to
nothing.
It was envisaged that a workers' bank be established having tripartite
representation on the Governing Body consisting of representatives of the
Government, trade unions and co-operatives.
The Government would provide an
initial amount of say 50 per cent whilst the other bodies and/or their members
would also contribute.
It would be expected that the Government would progressively relinquish its share of the initial capital investment and that the
bank would be in the hands of the movement.
Profits would be used for furtherance of the aims of both the movements.
Group D
Mr. J.R. 7eloso (Philippines) - Chairman
Mr. R.M. Oca (Philippines)
Mr. H.S. Regala (Philippines)
Mr. D.C. Punzalan (Philippines)
Miss Chen Hue Yi (China)
Mr. Hsiung Shaw Jen (China)
Mr. Nguyen Due Dat (Viet-Nam)
Group Adviser: Mr. Ken Gordon
The group Work was subdivided into three guidelines:
objectives for the collaboration between trade unions and co-operatives;
barriers to collaboration between trade unions and co-operatives;
the type of organisational set-up needed between trade unions and cooperatives to promote common plans and objectives, to solve problems of
financing, etc.
I. Objectives for the Collaboration
Between Trade Unions and Co-operatives
Countries involved have common economic situations that need improvement.
At present, trade unions to acquire economic and social betterment for
the members are using collective bargaining as the only vehicle.
Trade unions to acquire economic and social betterment for their members could use another vehicle, through co-operatives.
II. Barriers to Collaboration Between
Trade Unions and Co-operatives
Legislative barrier: each movement is governed by separate laws thus
making it difficult to give out an effective collaboration.
Government structure:
each movement is supervised by separate government agencies which makes it difficult to effect collaboration.
- 109 -
both the co-operative and trade union moveAt present there are
ments do not have central organisations.
several federations in each movemer&t, making it difficult to effect
collaboration.
Pragniented organisations:
Pinanoe problems: lack of capital is a common problem in the coIn the trade union movement although they have
operative movement.
the necessary capital this is by legislation or by practice used only
for trade union purposes.
Lack of management skills: although there are intensive educational
and training programmes undertaken, the lack of managerial skill is
still a problem, primarily because of competition from private sector
which can afford to pay good managers at better wages.
III. The Type of Organisational Set-Up
Needed to Effect Collaboration Between
Trade Unions and Co-operatives
1.
In view of this present situation we recommend two approaches:
(i)
the creation of a central co-operative council to be composed of
representatives from the various trade union and co-operative
This council would elect an executive committee,
federations.
which would formulate basic policies needed to tackle the
This council can be
obstacles and barriers of collaboration.
financed from contributions from the various federations of 00One main problem of both moveoperatives and trade unions.
One of the main objectives of the council
nients is finance.
could be to set up a fund organisation whose capital could be
derived from contributions from the various federations or contributions from voluntary organisations whether national or
The fund raised here would then be initially
international.
The council would
used to finance the co-operative movement.
be a voluntary organisation without governmental involvement.
This council would be the forerunner to a more concrete central
The initial objective of this
organisation for both movements.
council would be to link the two movements and eventually effect
a collaboration;
(ii)
Although
the second approach would be from the lower level.
collaboration between the two movements is affected by legislation and governmental structure, the trade unions, particularly
in two countries, the Republic of the Philippines and the
Republic of China have been encouraging the co-operative moveIn the case of the Republic of China, these organisament.
tions initiated or encouraged by the trade unions are not
governed by the co-operative law.
These so-called welfare
societies are substantially co-operative organisations in
In the case of the Republic ci' the Philippines, trade
nature.
unions had initiated organisations of co-operatives under the
In both countrias it has been
Philippines Co-operative Law.
progressing very well.
We recommend that we encourage this move from the lower level because we feel
that the national level movement will take time in view of the tremendous
In conclusion we believe that these two
obstacles they have to face.
approaches will eventually lead to effective collaboration between trade unions
and cc-operatives.
- 110 -
Joint Committee on Workers' Productive Co-operatives
Action Trade Unions and Co-operatives Can
Take in Common to Promote Co-operatives
Function of consultative body (apex) by apex organisations of trade
unions and co-operatives either at national or institutional level.
Feasibility study in fields envisaged (economic/trade union cooperative relation, requirements, consultation of labour, etc.)
Financial contribution by trade unions:
trade unions' investments in co-operatives (loan or share);
co-operatives accepting trade union funds;
getting improved legislation to allow such investments either way.
Obstacles Preventing Success
Will trade union or co-operatives be limited to institutional membership?
Will individual members of trade unions only be envisaged in the cooperatives?
Will there be a limit to institutional members?
How will state intervention in trade unions be dealt with?
Remedial Actions
workers' members should be trade union members arid co-operative member;
hired workers should have trade union rights;
labour problems should be solved according to trade union principles;
conflict between institution and individual members arbitrated by apex
consultative body;
ensure collaboration with other types of co-operatives and subcontracting from private firms.
Kind of Co-operatives to be Started by
Common Actions
The "joint committee" agreed that the following could be started in order
of priority:
Service production
Transport
Labour
Construction
Printing
Catering
Plantation
Ready-made garments and others
Necessary Preparations Inside and
Between Organi sations
1.
2.
Education
Information and publicity among members and mass media
By each and jointly - vocational training after the establishment of
co-operatives.
APPEND]I VI
Selected Country Statements
by
A.P. MABARAJ
FIJ I
A.
Introdu.ction
The colony of Fiji comprises about 844 islands and islets but almost
90. per cent of the total land mass of 7,055 square miles is contained by the
The
About 100 islands are inhabited.
islands of Viti Levti and Vanua Levu..
Cultivation is
centres of the two main islands are mountainous and broken.
It is estimated
generally restricted to the coastal fringes and river valleys.
that approximately one-sixth of the land in the group is flat or greatly
undulating, one-sixth rolling and hilly and the remainder steep.
Population
Censuses of the population have been taken decennially (with one
exception) since 1881, the last being in September 1966, the results of which
A
have been published and released for general information in July 1968.
compulsory registration system on the English model enables fairly accurate
At the end of
estimation of the population during the inter-census years.
1969, the total population was estimated to be 526,765, made up as follows:
Estimated Population at 31 December 1969
Class of population
Males
Females
Total
Population
per scj. mile
Fijians
Indians
Europeans
PMEND
Polinesian, etc.
Rotumans
Chinese
Others
108
128
6
5
219
262
14
10
3 019
271
037
939
198
085
3 283
3 113
2 412
105
893
947
365
341
7 100
6 312
5 431
376
31-17
37-27
2-04
1-47
1-01
0-89
0-77
0-05
269 593
257 172
526 765
74-67
111
134
8
5
856
008
167
256
3 817
3 199
Economic
In a little over a decade Fiji's total volume of trade has grown from
about F$30 million to F$13l million and there is no sign of any slackening in
this growth.
In 1969, imports reached a record P$77,888,l46 - over F$9 million more than
Despite a trade deficit of
Exports were valued at F$53,226,600.
about F$24 million, Fiji ended the year with a surplus of overseas funds.
There was a similar pattern in 1968 when there was a trade deficit of fl20 million.
firstly, an inflow of capital from overseas and,
There are two reasons for this;
Last year, tourism alone
secondly, the "invisible0 earnings from tourism.
The capital inflow came mainly from Britain
brought in nearly F$23 million.
in 1968.
- 112 in the form of grants from commonwealth development and *elfare funds to help
finance development projects and from private investment in primary and
secondary industry and tourism.
The development of the four industries which earn the greatest amount of
foreign exchange for Fiji (i.e. sugar, tourism, gold and copra) has largely
Fiji will continue
been made possible by the investment of overseas capital.
to need overseas capital investment if employment is to be found for the large
number of young people, coming on the labour market every year.
The need to develop existing industries and establish new industrial
The pressure results from a rapidly
activities is a pressing problem.
expanding population which now totals about 526,000 (of which nearly half is
under 16 years of age) and is expected to double in 30 years, despite a successful family planning campaign which has resulted in an appreciable drop in birth
rate.
To help meet the problem of creating employment nö. of continuing to raise
the standard of living, the Government is making determined efforts to attract
more overseas investment in Fiji.
The value of trade in Fiji for the past three years has been:
1968
1969
fl'OOO
P$'OOO
P$t000
Previous highest
Year
F$'OOO
Domestic exports
Re-exports
34 917
7 745
39 246
9 872
42 512
9 679
46 242
9 872
1964
1968
Total exports
42 662
49 118
52 190
52 230
1964
Total imports
Total trade
56 291
98 952
64 402
117 520
77 886
182 267
68 402
177 520
1968
1968
13 629
19 283
25 696
19 283
5 264
1968
1963
1967
Balance of visible
trade:
Deficit
Surplus
-
-
-
Economically Active Population
In June 1968 the labour force in wage-earning employment was 33,268;
4.
The distributhe figures for 1969 were not available at the time of writing.
tion of employees within inthistries in 1967 and 1968 is shown in the following
The figures relate solely to persons employed as manual workers.
table.
They do not include self-employed persons, for example, farmers and fishermen,
or casual workers such as cane-cutters or dookworkers; domestic workersin
private households, office workers and established members of the civil service
are also excluded.
-
113 -
Total
Total
Industry or Trade
1968
1967
Agriculture, forestry and fishing
Mining and quarrying
Manufacturing
Construction and engineering
Sanitary services
3 750
1 798
9 191
7 070
3 238
1 852
8 478
6 772
3 879
2 814
4 013
3 761
2 421
3 504
33 268
30 698
753
Co oime roe
Transport, storage and communications
Services
TOTAL
B.
672
Co-operatives
Although the co-operative legislation in Fiji is a little over 20 years old
Co-operatives existed
co-operative way of business is not new to the Fijians.
in Fiji prior to 1947 when the legislation was enacted but these societies did
not have the benefits or governmental assistance which the co-operative societies'
The
ordinance provided mainly in supervision, audit and educational spheres.
informal groups who worked as co-operators dealt mainly in copra marketing and
consumer supplies and this pattern was not disregarded or discouraged with the
enactment of the law but was incorporated into the "new system".
With the passage of time different types of societies came into being as
needs arose and today there are about 960 societies of the following types.
Consumer/marketing
Consumer
Thzift and credit
Land purchase and land holding
Housing
Handicraft marketing
Tholesale
1t would be appreciated that due to the geographical limitations most of the
societies are very small in size and attempts towards amalgamation or integration
can only be applicable to a limited degree.
Development
1969-1970
By the end. of
The development of societies continues at a very fast rate.
the year there will be over 960 societies of all types 'under the department's
The major development was in consumer societies in the central
supervision.
Thile many of these societies are quite small they are meeting an
division.
important need in the area.
The following table shows the development over the past 20 years:
Societies
Staff
1949
1954
1959
1964
1968
1969
1970
27
55
6
87
17
227
41
642
75
81'
3
960
115
98
The co-operative department continues to fulfil the functions of the promoting of new societies together with supervision and audit of existing societies.
Copra markeied was in excess of
Membership of societies rose to nearly 27,000.
9,500 tons valued at F$l,250,000. Banana shipments totalled 58,600 cases
Turnover in consumer stores both wholesale and retail
valued at P$200,000.
continued to rise rapidly and was in excess of P$4,000,000.
- 114 -
More requests for consumer societies are received than any other type of
society.
Total turnover in consumer and marketing societies was in excess of
By the end of the year it was clear that the rate of development
5,OOO,000.
was outstripping the staff resources of the department, and that a period of
consolidation was necessary.
Co-operative Bank
A co-operative bank is at present non-existent but an ILO credit expert is
in the country at present preparing a paper for the establishment of a cooperative bank.
An apex body of the credit societies does exist but due to
lack of capital it is not in a position to fulfil the needs it was intended for.
There is only one legislation for co-operatives and all societies are
governed by this ordinance.
A feature of Fiji legislation is that credit
unions in Fiji do not come under the co-operatives.
Societies' ordinance are
registered under a separate legislation altogether.
Trade Unions
1937.
Informal groups began to be formed mainly among the farmers around
At that time there was no ordinance to govern such groups or associations.
The Industrial Association Ordinance was passed in l94 and came into
force in 1942 under which all trade unions and industrial associations were
req.uired to be registered.
The Trade Unions' Ordinance was passed in 1964 and came into force in 1965.
All trade 'unions registered under the Industrial Association Ordinanoe had to
be registered under this Ordinance and those formed thereafter.
At the end
of 1969 there were thirty-one registered trade unions in Fiji with membership
exceeding 15,000.
The Trade Unions' Ordinance was passed in 1964.
This was based on the
models of the then British Colonies, especially Kenya.
Modifications were also
provided by the UK Government for the purpose of special provisions which were
necessary for the conditions existing in Fiji.
Trade unions in Fiji are organised industry-wise.
The major ones
are:
Sugar Employees' Union
Public Works Employees' Union
Mineworkers' Union
National Union of Factory and Commercial Workers.
There is a Fiji Trades Union Congress to which most of the major unions are
affiliated and meets annually or when need arises.
There is also an apprenticeship scheme controlled by the Fiji Apprenticeship Council and although relatively new it does provide an excellent opportunity
for the youth in embarking on a career or trade.
Inter-relationship between trade 'unions and co-operatives has been discussed
'under the section on co-operatives.
Inter-relation between trade unions and
co-operatives is not developed to any great extent.
Although in a few areas
such as the gold mines and sugar mills, co-operative shops are being run by
workers, the relationship is not of a trade union with co-operatives but with
individual members.
It is encouraging to note that requests are being made by
trade unions to commence certain business involvements on a co-operative basis.
The most recent is for a cafeteria from the dockworkers in Lautcka.
Consumer, credit and housing co-operatives can benefit trade 'unions if
jointly sponsored.
To some extent this is being recognised by the workers
themselves and a slow start is being made.
The establishment of co-operatives
at workplaces although not impossible can present some difficulties even though
certain companies have actually allocated land and buildings for their workers
to run co-operative shops.
- 115 -
Problems
The co-operative movement in Fiji is trying to achieve various goals with
The country lacks capital, expertise and co-operative
limited resources.
education and this leads to numerous difficulties either in starting a cooperative or even when they have started their operations
Capital accumulation being a long-term process is hindering rapid expansion
Establishment of a co-operative bank or an apex credit
of proposed activities.
institution might not prove aiiccessful unless capital can be either injected
from outside or accumulated from within.
MarketHousing co-operatives are facing similar difficulties of finance.
ing societies function in their small way with great effectiveness meeting the
needs of the people but large-scale operations do not seem too feasible because
At present co-operatives have not reached a stage
of geographical limitations.
Furthermore, developments lack spontaneity hence
of being self-regulated.
Thile it is appreciated
they, to a great extent, become government-orientated.
that this is not the ideal, alteiatives seem difficult and if nothing else, the
effort to promote co-operatives could safely be said to be
educative.
There are bound to be failures and success but it can only be optimistically
hoped that one day the movement in Fiji will reach the maturity to be selfregulating, self-reliant and a stage may be reached when spontaneous development
would be possible.
Until the people appreciate that co-operatives are only a means to an end
In terms of co-operative
and not an end in themselves, progress may be slow.
The achievements so far have
development 20 years is a fairly short period.
not been discouraging and allowing the consolidation required the societies
which are small today may one day take on themselves tasks that today seem
beyond their reach.
- 116 -
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- 118 -
INDONESIA
by
Mohammad DIPONEGORO
Introduction
Indonesia, an archipelago of more than three thousand islands lingering
on the Equator, stretches along a distance of about three thousand miles,
Producing 40 per cent of the
connecting the Indian Ocean and the Pacific.
world's rubber supply, Indonesia also produces 24 per cent of its palm oil,
8 per cent of its tea, 6 per cent of its sisal fibres, 2 per cent of its sugar,
2 1/2 per cent of its coffee, 6 per cent of its tobacco, 1 1/2 per cent of its
petroleum products, 20 per cent of its tin, 30 per cent of its pepper, and
With an increase rate of 2 1/2 per cent per year,
33 per cent of its copra.
Indonesia is now estimated to have a population of abour 110 million people,
The
earning an average income per capita of approximately US8O annually.
greatest portion of the population lives on the island of Java which constitutes
one-fourteenth of the entire land area of the archipelago, making the urgenciy
of transmigration one of the most crucial problems of the country.
The
proportion of people engaged in different fields of trade, and that of the
country's products in the corresponding sectors, are estimated as follows:
yields of Trade
Agriculture, fishery, etc.
Industry and mining
Trade and banking
Administration
Communication, and transport
Others
Percentage
of Population
59
10
8
3
2
7
Percentage
of GNP
57
10.5
13
8.4
3
8.1
Co-operatives
History
Traditional co-operative community has been a unique feature of the
Indonesian society since the unknown past.
In the Indonesian village, the
construction of houses, wedding festivities, funerals, are co-operative
endeavours of the whole inhabitants of the village.
The Indonesian village
is an informal co-operative society.
Co-operative endeavours as such are based
on the family principle, known as goton-royong, meaning "mutual assistance in a
united group".
It may sound strange, however,, that the first formal co-operative
societies set up in Indonesia did not grow naturally from this humanistic outlook.
They were a reaction against the economic domination of European, Chinese and Arab
capital forces in the country.
At the wake of the twentieth century, nationalist
leaders propagated the opening of co-operative shops retailing consumer goods.
Economically, these co-operatives were a failure, since most of the organisers
were almost totally ignorant of the simplest economic ideas.
They were
political tools for the nationalist movement, rather than pure economic ventures.
This mishap was followed by the issuance of the first Co-operative Act by the
Dutch, which practically eliminated the opportunity for Indonesians to set up
co-operatives, rather than gave them legal status.
With the promulgation of more
tolerant regulations co-operatives caine to life again.
During the Japanese
military occupation, co-operatives were non-existent1
The so-called ICumiai, a
Japanese word for co-operative society, was simply a distributing agency of
consumer goods supplied by the military administration, and a tool for collecting
products and materials from the people for the purpose of war maintenance.
After
the attaiament of independence, the so-called village co-operative was introduced
as a stabilising factor of the country's economy which was then under a tight
blockade by the Dutch.
West Java was the pioneer of this new co-operative
movement.
On 12 July 1947 the first Co-operative Congress was held at
Tasimalaja, West Java, attended by co-operators from 53 districts on Java and
- 119 -
Among the important conclusions of' the Congress were the establishment
Madura.
of SOKRI (t.he Central Co-operative Organisation of the Indonesian People), the
observance of 12 July as the National Co-operative Movement Day, and the
acceptance of the principle of oton-royon as the basis for the Indonesian
SOKRI was
The second Congress was held in Bandungin July 1953.
co-operative.
dissolved and Dewan Koperasi Indonesia (the Indonesian Co-operative Council) took
The Congress concluded to set up an institute for co-operative
its place.
education, to open co-operative high schools, to propose the passing of a new
Co-operative Act, and to appoint Dr. Mohammad Hatta as the Father of the
Later in 1959 a major political change took
Indonesian Co-operative Movement.
It was then that the
place, and the principle of guided economy was introduced.
Government started to interfere into the internal affairs of' co-operative
The Dewan Koperasi Indonesia was eliminated and forced to submerge,
societies.
KOKSI
and KOKSI (United Co-operative Organisation of Indonesia) was created.
became the only legal co-operative federation, whose leadership was in the hands
of the President and the Cabinet Minister in charge of co-operative affairs.
Representatives of the co-operative movement and experts, though by regulation
The
were entitled to the leadership of KOKSI, were not given any share in it.
intensity of' the Government's interference reached its peak with the promulgation
With it, the Indonesian co-operative was
of' the new Co-operative Act in 1965.
made a political tool for the benefit of the existing political pressure groups.
The principle of NASXOM (a merger of nationalist, religious and communist
MUNASKOP (National Co-operative
elements) was introduced into the co-operative.
Conference) was organised to become the supreme body of the co-operative movement.
Later after the abortive
The Indonesian co-operative lost its true nature.
communist coup, radical measures were taken to rehabilitate the co-operative
KOKSI and IVLUNASKOP were dissolved, and a new democratic federative
movement.
A new
body, GERKOPIN (Indonesian Co-operative Movement) was organised.
The co-operative resumed its true
Co-operative Act was passed in 1967.
It was thereafter that the Dewan Koperasi Indonesia reco-operative principle.
emerged and took GERKCPINtS place as the federative body of' all types of
co-operative.
Legislation
Co-operative Acts that have been introduced in Indonesia are chronologically
as follows:
Verordening op de Co-operatieve Vereenigingen (Regulation for Co-operative
Societies), promulgated in the Government Gazette of 1915, No. 431.
This
was an exact copy of a Dutch Co-operative Act passed in 1876, regulating
co-operative societies in the Netherlands.
Its application to the
Indonesian setting was felt awkward and impractical (see History).
It made
the existing co-operative societies illegal.
Regeling Inlandsohe Co-operatieve Vereenigingen (Regulation for Native
Co-operative Societies), promulgated in the Government Gazette of 1927, No. 91.
This regulation was a product of the survey commission on co-operative
societies in Indonesia conducted by Dr. Boeke.
It gave legal status as
corporate body to co-operative societies under the traditional law.
As
indicated in its title, the regulation only applied to co-operative societies
founded by native Indonesians.
Algemeene Reguling op de Co-operatieve Vereeniging (General Regulations for
Co-operative Societies), proniqigated in the Government Gazette of 1933, No. 108.
This was an amended version of' the Regulation of 1915.
It applied to
This regulation came
co-operative societies founded under the Dutch law.
into effect side by side with the Regulation of 1927, and its issuance was
regarded a measure to cause breakage in the nationalist movement.
Regeling Co-operatieve Vereenigingen. (Regulation for Co-operative Societies)
This was a translated
promulgated in the Government Gazette of 1949,No. 179.
version of the Regulation of' 1927, issued by the post-war Dutch Federal
Government in Indonesia.
This was enacted when the
Act No. 79 of 1958 on Co-operative Societies.
Tentative Constitution of 1950 (the second Constitution) was still effective,
to which the Act was referred.
- 120 -
Act No. l'4- of 1965 on Co-operatives, promulgated on 2 August 1965.
This
new act was drafted in accordance with he political trend of that time.
Radical ideas were infested in the articles, introducing the concept of
co-operatives being a tool of the Revolution leading to Indonesian Socialism,
etc. (see History).
Act No. 12 of 1967 on Fundamentals of Co-operatives, promulgated on
The GERICOPIN was co-author of its draft.
Now being
18 December 1967.
still effective, this Act has rehabilitated the co-operative movement to
its true co-operative nature.
All these Acts or Regulations are co-operative legislation for all types
Legislation for a certain type of co-operative in the form of
of co-operative.
an act has not been known in Indonesia.
However, a minister in charge of
coroperative affairs may issue regulations on certain types of co-operative
that have legal effects.
Govermnent Department
Co-operative affairs have been under the scope of different ministries.
The Ministry of Welfare, the Ministry of Economic Affairs, the Ministry of
Transmigration, Co-operatives and Village Community Development, the Ministry
of Interior, the Ministry of Transmigration and Co-operatives, have at one
time been in charge of co-operative affairs.
It is now the Ministry of
Transmigration and Co-operatives that is in that function.
This Ministry has two Directorates-General, one exclusively dealing with
transmigration affairs, another exclusively with co-operative affairs.
The
Directorate-General of Co-operatives opertes at the national level, and is
responsible to the Minister.
Its lower echelons in provinces and districts are
called respectively, Directorate of Co-operatives Level I and Directorate of
Co-operatives Level II.
The main functions of these Directorates in their own corresponding area of
operations are (a) encouraging the growth of co-operative societies in all
economic sectors;
(b) providing advice and guidance to co-operators;
(c) administering regular and planned education and training in co-operative
sciences and techniques;
(d) issuing legalisation of corporate body to
co-operative societies;
(e) carrying out supervision and survey on the
activities f co-operatives;
(f) collecting data and facts for statistics of
the co-operative movement.
General Estimation of the Situation
of Co-operatives
As has been proved, the life-curve fluctuation of the co-operative in
Indonesia is very much susceptible to changes of political and economic situations
in the country.
Much damage has been suffered by co-operatives all over the
country because of the political turbulance and economic depression during the
previous administration.
The restoration of political and economic stability,
which is now under way, naturally exerts a positive impact on the healing process
of that damage.
A re-evaluation of the co-operatives is necessary to understand
their real situation.
A new method applied by the Directorate-General of
Co-operatives is the qualitative categorisation of co-operative societies, in order
to make an estimation of the remaining potentials of the co-operatiies.
The
assessment is based on three criteria, namely, (a) organisation, (b) enterprise,
(c) mentality.
There are three classes of co-operatives;
the A class, the
B class, and the C class.
The A class includes those with sound organisation,
sound enterprise, and sound mentality.
The A class is good, the B class fair,
the C class poor.
The A class and B class constitute an important capital for the
restoration.
The C class requires much effort for internal rehabilitation.
A
survey conducted by the Directorate-General of Co-operatives shows that 15 per cent
of the total co-operatives belong to the A class, 50 per cent to the B class, and
35 per cent to the C class.
In figures, they are respectively, 2.312;
6.547;
and 4.432.
In the rehabilitation of the country's economy, evidently the co-operative
is not playing a relatively big role.
However, several co-operatives in certain
fields, such as those of copra and rubber tenders, are well ahead in their capital
- 121 -
They have a
forming and rehabilitation of their organisation and enterprise.
The greatest damage due to the situational
positive impact on the economy.
Many have
instability is suffered by consumer and textile co-operatives.
Even so there are still a considerable number of A class
dropped out of scene.
and B class co-operatives, namely 65 per cent, that can be expected to play a
The common main weaknesses
more effective role n the economic reconstruction.
of many co-operatives are lack of capital and insufficient knowledge and skill in
Among co-operatives of certain trpes,
co-operative management and enterprise.
there is also a danger that the faith in the ideology of co-operative deteriorates.
However, whatever fate the Indonesian co-operative has to face now, it will
The Constitution
eventually become the basic element of the country's economy.
clearly states, that "the economy should be set up as a joint endeavour based
upon the family principle" - and that is co-operatives
Types of co-operative societies found in Indonesia are farmer co-operative,
rubber tender co-operative, copra tender co-operative, tobacco tender co-operative,
coffee tender co-operative, clove tender co-operative, sugar cane tender
co-operative, vanilla tender co-operative, nutmeg tender co-operative, fishery
co-operative, cattle raiser co-operative, fowl breeder co-operative, credit and
banking co-operative, consumer co-operative, textile co-operative, batik
co-operative, handicraft co-operative, and the so-called "functional"
"Punctional" co-operatives are those organised by goverament
co-operative.
employees or armed forces personnel.
The structure of their organisation is usually stereotyped to have three
The primary
levels of hierarchy, though some have four or two levels.
The
co-operative, the central co-operative, and the "mother" co-operative.
Usually
primary co-operative is at the bottom9 its members being individuals.
At the provincial level there is the
its area of operation is in the district.
The
central co-operative, or the Pusat, whose members are the primaries.
Itlnotherlt co-operative, whose members are the Pusats, operates at the national
The Dewan Koperasi Indonesia is the federative body of all types of
level.
co-operative, organised in the similar hierarchical manner.
Trade Unions
Similar to the history of co-operatives in Indonesia, the first formal trade
However,
unions in this country were political tools of the nationalist movement.
as the nationalist movement consisted of different political groups, the trade
unions became more and more a tool of the political group to which they were
Yet there were trade unions which were non-political,
respectively affiliated.
in the sense that they were not affiliated with certain political faction, but
exclusively concerned themselves with the preservation of the basic rights of
These two types of trade union still exist at the present.
labourers.
In the co-operatives there are also trale unions, but they are few in number
because usually there are not many labourers engaged in enterprises owned by
co-operatives.
As I have a too superficial knowledge of trade unions, I shall leave this
matter to my colleagues of the Indonesian Trade Union for their competent
deliberation.
Inter-Relation Between Trade
Unions and Co-operatives
Such inter-relations between trade unions and co-operatives as practised
The only relation between
in some other countries do not exist in Indonesia.
trade unions and co-operatives is the employer-labour relation, in which the
However, such industrial relation usually
co-operative acts as the employer.
goes very smoothly and with mutal understanding.
It is worth noting, however, that in 196'-I- a seminar on "The Role and Status
It was
of Labourers in the Indonesian Co-operative" was once held in Bandung.
initiated by the Minister of Co-operatives to stimulate a radical change in the
Labourers working at enterprises owned by
membership of co-operatives.
co-operatives should have the right to become members of the co-operative.
Outwardly, this initiative was very progressive and in. conformity with the
- 122 -
ideology of co-operative.
In effect, the seminar was an effort to infiltrate
the co-operative movement and to gain control over it through trade unions
affiliated with the political pressure groups then dominating the Government.
The same was true with the issuance of the Co-operative Act of 1965
(see History).
It gave greater opportunity to trade unions to join control of
the co-operatives for the sake of certaii political ideologies.
Another case that may show the share of labourers in the co-operative
management is the enterprise council.
But this has no political implication.
At some enterprises owned by co-operatives, such a council comprises of workers
of all ranks, regardless of their affiliation with trade unions.
The council
delflerates on matters regarding targets of production, methods to achieve
them, and other practical matters that arise in the management of the enterprises.
It is also worthy of statement that the Dewan Koperasi Indonesia has been
collaborating with the Federation of Employer' Association of Indonesia in
holding seminars and discussions on problems of labourers.
V.
Prospects for Future of
Co-operatives
The main problem now faced by co-operatives in Indonesia is rehabilitation.
In coping with this problem the co-operative has to join hands with the
Directorate-General of Co-operatives and its lower echelons.
The main aspects
of rehabilitation are (a) co-operattve management; (b) co-operative enterprise;
and (c) co-operative education.
The rehabilitation of co-operative management could be reached by
horizontal and vertical consolidation, co-ordination and integration of the
remaining potentials of the co-operative, starting with the consolidation of
primary co-operatives.
For the efficiency of operation, the co-operative
organisational hierarchy should be simplified into two levels.
The managerial
functions of co-operative executive boards as policy-makers, and those of
managers as executives, should be developed and upgraded.
Dewan Koperasi
Indonesia should be established in every district.
The rehabilitation of co-operative enterprises could be achieved by the
upgrading of knowledge and skill of co-operators through education and training,
by the promotion of qualitative and quantitative producing ability and marketing
ability of co-operative enterprises, especially those in the field of agriculture,
handicraft and small industry.
As finance is a primeproblem for co-operatives,
credit and banking co-operatives should be activated.
More banking facilities
should be provided for co-operative enterprises.
To close this statement, I should like to mention several points as regards
promotion of inter-relationship between trade unions and co-operatives, about
which the Dewan Koperasi Indonesia has taken consideration;
better inter-relationship between the two parties stems from better mutual
understanding between them.
It is therefore of great necessity that trade
unionists learn more about co-operatives, and co-operators more about trade
unions
federations of trade unions and Dewan Koperasi Indonesia should collaborate
in tackling problems of trade union in the co-operative;
(0)
exchange programmes among different nations should be stimulated for
education and information on matters regarding trade unions and co-operatives.
-l23 -
Annex
A.
Number of Co-operatives
1932
1540
1939
574
1950
1 155
?
1951
5 770
1 003 324
35 313 040.-
1952
7 667
1 179 322
56 389 371.-
1953
8 223
1 392 345
89 702 602.-
1954
9 614
1 648 037
148 195 600.-
1955
11 394
2 036 192
267 910 017.-
1968
8 381
1 503 769
259 917 253.82
16 658
3 748 608
52 261
Number of Co-operative Cadres
00-operative high school students
2 462
Co-operative academy students
1 560
General cadres
28 040
Special cadres:
(a)
financed by the co-operatives;
(b)
financed by the Government
Total
?
Rp.
During 1969 up to March 1970
I
Savings
Co-operatives
1970 (March)
B.
Members
Year
7 014
12 952
52 028
4 500 000.-
1 262 442 078..-.
- 124 -
JAPAN
by
MOTOYOSHI ECOBAYASHI and ATStJSHI NAGMàTStJ1
eograhical Peatures
Japan stretches along the north-eastern Pacific coast of the Asian
Her greatest span is 2,400 kilometers from north to south.
She is
continent.
made up of the four main islands - Hokkaid.o, Honshu, Shikoku and Kyushu - and
With a total land area of 377,384 square kilometers,
more than 3,000 islets.
the island country occupies less than 0.3 per cent of the territory of the world
Japan, mostly covered with forests is al-i island country. characterised
land. area.
by complex geographical features with basins and mountains of various heights and
shapes.
About 80 per cent of Japan's land area is mountainous.
Administrative Divisions
Japan has forty-seven local divisions (including Okinawa) called prefectures,
each having its prefectural government.
Population
The present population, which has exceeded the 100 million mark, is the
Japan is the fifth most densely populated country
seventh largest in the world.
among all countries (with 5 million and more inhabitants).
The population
density per square kilometer is now 278.
Population engaged in trades:
indicated by table 1.
Agriculture
In recent years, there has been a steady decline in the number of farm
households as well as farm population.
According to recent surveys, the farm
population, which was 37 million in 1955, has been declining at the rate of about
800,000 per year and had diminished to 27 million by 1968.
Persons engaged in
agriculture accounted for 19 per cent of total employed persons in 1968.
The
proportion is still larger than those in the most developed Western nations,
Put
4 per cent for the United Kingdom and 6 per cent for the United States.
this ratio is not so large when compared with such developed countries as Prance
(18 per cent) and Italy (25 per cent).
Domestic Trade
Domestic trade is an old industry with growing importance.
In fact, the
expansion of the domestic market for consumer goods was among the most important
factor in Japan's recent economic prosperity.
The number of persons engaged in
domestic trade increased to 7,277,473 in 1968.
The income of these persons
accounts for 17 per cent of total national income.
In spite of the enormous
number of persons engaged in domestic trade, the number of persons per store is
small.
The number of wholesale and retail stores in Japan was as many as
1,670,303 in 1968 and smaller stores with less than four persons account for
81 per cent of the total.
These smaller stores are still operated generally by
a proprietor with his unpaid family workers.
On the other hand, most department
stores in large cities are among the largest ones of the world, though their
1
This paper is a compilation of extracts taken from the individual country
statements prepared by these participants.
- 125 -
There has been
expansion is carefully checked by the Department Store Council.
also a rapid growth in sales in recent years through instalment sale stores for
durable consumer goods in particular and supermarkets for daily consumer goods.
In this domestic trade field, the consumers' co-operative movement has been
In this connection,
playing a greater part with a view to consumers' protection.
details are given below.
Foreign Trade
With limited land area, poor natural
Foreign trade is Japan's lifeline.
resources and a large population to feed, Japan has to develop he manufacturing
industry and increase exports in order to purchase food and raw materials.
Japan stands in fourth place in foreign trade after the United States, the
In 1968, the ratio of
Federal Republic of Germany and the United Kingdom.
exports to total national income was 12 per cent and that of imports 12 per cent
These
compared with 22 per cent and 24 per cent, respectively, in 1934-1936.
ratios, although lower than those of Canada, the Federal Republic of Germany and
the United Kingdom, are rather near to those of France (exports 13 per cent,
Japan's balance of international payments has
imports 14 per cent in 1968).
Thanks to the increase of exports and capital in-flow,
long been unfavourable.
the over-all balance became favourable for the first time in 1962 when it
registered 236 million dollars, and in 1968 it exceeded one billion dollars.
Thus, in 1968, Japan had gold and foreign exchange reserve as much as 3
Value of exports and imports is indicated in table 2.
billion dollars.
National Income
In 1968, the gross national product of Japan amounted to 51,077,000 million
yen with an annual increase rate o± about 16 per cent during the past ten years.
However, it is
This means Japan ranks in second place among the free nations.
evident that the national income per capital is still low, being 402,500 yen,
According to national income by
which ranks twenty-second in the world.
industry in 1968, the primary industries accounted for 11 per cent, secondary
industries 38 per cent and tertiary industries 52 per cent.
Government Organisation
The government organisation of Japan follows a parliamentary system based
on the separation of powers among the legislative, executive and judicial
branches.
The legislative: the Diet, the supreme legislative organ, derives its rights
from the sovereignty of the people and has the authority to enact laws and to
It is a bicameral
determine national budgets, national policies and plans.
organ consisting of the House of Representatives and the House of Coimcillors.
The members of both Houses are elected by the Japanese people who are 20 years
old and over on the basis of universal, ecival and direct suffrage.
The executive: the Cabinet consists of a Prime Minister who is nominated by the
Diet from among its members and nineteen cabinet members appointed by the Prime
It executes national policies according to the laws and budgets
Minister.
There are 12 ministries and 5 agencies headed by state
approved by the Diet.
The number of government
ministers in addition to the Prime Minister's office.
employees is fixed at 1,986,000 for 1969.
Political Parties
The 486 members of the House of Representatives are elected for a term of
four years from multimember constituencies.
The 250 councillors are elected for a six-year term, 100 from the national
Every
constituency while the remainder are from prefectural constituencies.
At present, in the
three years, one-half of the councillors are elected anew.
- 126 -
House of Representatives, 59 per cent of the seats ar held by the liberaldemocrats and 19 per cent by the socialists,
On the other hand, in the House
of Councillors, 55 per cent of the seats are held by the former and 25 per cent by
the latter.
Consumers' Co-operative Movement
Consumers' co-operative movements have been most closely connected with the
trade union movement among three co-operative movements, agricultural, fishery
and consumers' co-operative movements.
Therefore, consumers' co-operative
movement will be explained below.
Historical Features
In spite of rapid and high progress of modern industry in Japan, consumers'
co-operatives by working people remained far behind and agricultural co-operatives
instead constituted the central axis in co-operative movement in Japan, as contrary to other industrial countries where, as typically seen in England, the cooperative movement usually developed on the axis of the growth of consumers' cooperatives mainly initiated by labourers.
That owed to the peculiarity of
Japanese capitalism, and marked the special feature of co-operative movement in
Japan.
There were three types of co-operatives consisting in the main stream of the
Japanese consumers' co-operative movement before the outbreak of the Second World
War.
One of them was the labourers' co-operative organised by the labourers
themselves with strong support from trade unions.
The co-operatives of this
type failed to hold themselves in the central stream of the movement and remained
dormant before and during the Second World War, and it was not until the l950s
that they revived fully arid constituted the axis in the movement.
The second
type of consumers' co-operatives were those initiated by employers as welfare
facilities furnished by each company and office.
They spread out and flourished
among big private enterprises and mines.
The third type was the consumers'
co-operatives by citizens, organised by intellectual citizens like governmental
officers and salaried men of middle class, spreading out in big cities and which
formed the central stream of the movement until the outbreak of the Second World
War.
The Japanese consumers' co-operative movement has woven its 80 years' history
with two patterns, roughly dividing it before and after the Second World War.
The movement in pre-wa and wartime periods was marced by a lack of political
freedom and severe, sometimes hysterical, government suppression upon trade
unions and other democratic movements which prevented it from growing in full
scale.
The trade union consequently shrunk and consumers' co-operatives,
especially those for labourers which largely depended upon the trade union,
could not come to full development, and finally was crushed by a hard blow with
the outbreak of the Second World War.
In the post-war period, the trade union
movement gained remarkable progress with the blooming of political freedom
which helped the co-operative movement to be reborn with special favour for
labourers.
However, because of severe suffering from discontinuation during
the war and economical instability after the war, it was not until the l950s that
labourers' consumers' co-operatives raised themselves up to the central stream
of the movement.
Immediately after the Second World War, the Co-operative
League of Japan, whose President was the late Dr. T. Kagawa, was founded.
The
pre-war co-operators throughout the country were all organised into the League
in the aftermath of the Second World War.
Six thousand five hundred societies
were actively playing important roles in the national democratic movement,
especially in the movement for self-guard for serious foods shortage.
The
present Consumers' Livelihood Co-operative Law was enacted according to the old
law and the Industrial Society Law was abolished.
The Japanese Consumers' Co-operative- Union was founded as the successor
to the Co-operative League of Japan, which was dissolved for legal
reasons and also because of financial difficulties.
The Union was formally
admitted as a member of the ICA in 1953, and at the Congress of the ICA in Paris
there was an appeal for the ban of the atomic bomb and promotion of co-operative
trade.
- 127 -
Today, the Japanese Consumers' Co-operative Union is a sole central organisaThere
tion with which various kinds of consumers' co-operatives are affiliated.
are 1,212 societies in all, with 10,080,000 memberships throughout the country.
Pu.rther detailed statistics
The total annual turnover is 149,400 million yen.
are indicated by table 3.
Legislation
Upon the
Industrial Society Law was enacted for the first time in 1900.
The old
law, agricultural, fishery and consumers' co-operatives were founded.
law was abolished in 1948 and three co-operative laws were put into force, that
is, Agricultural Co-operative Law in 1947, Consumers' Livelihood Co-operative
Law and Fishery Co-operative Law in 1948.
Government Department
Administration
Agricultural Co-operative:
Agricultural Co-operative Bureau
of the Ministry of Agriculture and
Pore stry.
Fishery Co-operative:
Co-operative Bureau of the Fisheries
Agency of the Ministry of Agriculture
and Forestry.
Consumers' Co-operative:
Livelihood Bureau of the Ministry of
Health and Welfare.
-
128 -
The organisatiøn map of the JapaneSe Consumers' Co-operative, other
co-operatives, labourers' welfare organisations and national federations of
l5rade unions.
The Organisation Map of the Japanese Consumers' Co-operative Union
Central Union of
Agricultural Co-operatives
National Federation of
Fisheries Co-operatives
National Federation of
University Students'
Consumers' Co-operatives
International Co-operative
c
Alliance
..
Japanese
Consumers'
Co-operative
Union
NIKYOREN
I.'
Prefectural Union of'
Consumers' Co-operatives
Japan Joint
Committee of
Co-operatives
1
Unit Society
Unit societ.J
Japan Co-operative Trading
Co. Ltd. (Trading Dept.)
..Medical Co-operatives
Icommittee
School Teachers'
Committee
Women's Council
National Federation of
Insurance Co-operatives
j for Labourers and
Consumers
1
National
Council of
Labourers'
We if are
National Federation of
Labourers' Banks
Prefectural
Insurance
Co-operative
for Labourers
and Consumers
Prefectural
Labourers'
Bank
National Labourers'
Housing Association
general Council of
Labour Unions of
Japan
The All-Labour Unions
Council
Neutral Labour Unions'
Association
1
National
Liaison
Committee of
Consumers'
) Organisations
-I' 4
Housewives'
Association
Women's Demboratic
Club
- 129 -
Table 1.
Population Engaged in Trades
(1,000 persons)
Year
Total
Agriculture
and
Forestry
Fisheries
Mining
Construction
Both sexes
1967
49 400
10 820
1968
50 020
9 340
580
290
3 420
540
270
3 700
Male
1967
29 720
4 990
440
260
2 980
1968
30 210
4 380
410
240
3 190
Fe male
1967
19 680
5 830
140
30
440
1968
19 800
4 960
130
30
510
(1,000 persons)
Year
Manufacturing
Wholesale,
retail trade,
finance, insurance and
real estate
Transport,
communication and
other
public
utilities
Services
Government
Both sexes
1967
12 600
10 290
3 270
6 660
1 440
1968
13 050
11 110
3 290
7 130
1 540
Male
1967
8 150
5 580
2 830
3 260
1 210
1968
8 290
6 040
2 840
3 480
1 300
Female
1967
4 450
4 710
440
3 400
230
1968
4 760
5 070
450
3 650
240
Source:
Bureau of Statistics, Office of the Prime Minister.
- 130 -
Table
2.
Foreign Trade
Value
(million dollars)
Quantity index of foreign trade
(1965 = 100)
Year
Exports
Imports
Excess
Exports
Imports
of
General
Machinery
General
Food and
beverages
Imports
283
100.0
100.0
100.0
100.0
10 442
8 169
11 663
-1 222
119.7
134.9
119.4
12 972
12 987
-16
148.6
176.7
146.6
160.6
1965
8 452
1967
1968
Source:
127.3
Ministry of Finance.
Table 3.
Number of Unit Societies (working)
Year
Total
Local
1965
1 185
493
655
37
1966
1 205
512
660
35
1967
1 225
525
661
39
1968
1 212
516
658
38
1969
1 213
522
650
41
Institutional
Federations
(1969)
Table
Total
Year
Number
1965
6 749 326
1966
1967
1969
Membership
Local
Average per
unit co-op
1968
4.
Institutional
Number
Average per
unit co-op
Number
Average per
unit co-op
5 879
3 470 159
7 093
3 279 167
5 006
7 458 091
6 374
4 068 500
3 389 591
5 136
8 173 847
9 313 381
10 085 000
6 892
4 556 779
5 467 200
6 122 322
7 977
8 680
5 472
10 595
3 617 068
3 846 181
11 728
3 962 380
6 096
7 933
8 605
5 845
- 131 -
Table
Year
5.
Number of unit co-op
Retail Turnover
Total turnover
(thousand yen)
Average purchase
amount per head
(yen)
25 359
983
83 076 482
100 308 959
1967
969
128 225 782
37 259
1968
969
128 177 189
1969
950
149 395 236
34 415
38 306
1965
962
1966
27 485
(1969)
Trade Union - Short History
A briefing on the history of Japanese trade unions can be given by
explaining the three major stages of its development; namely, when and how it
was founded, how it was suppressed during the war, and how it was developed in
the post-war period.
In the late l800s several trade unions, if they could be called that, were
organised in those industries such as textile factories by minority groups of
However, in the early l900s, owing to the improved production
skilled workers.
techniq,ue and general domestic demands, Japanese industry made great progress and
consequently employed the increased number of 'unskilled workers, Who were enrolled
The well-imown "life-long employment
as members of industrial trade unions.
system" can be traced from these days.
Prom the l930s to 1945, which was the war-time period, unions' movement
During this period,
was strongly suppressed by the militarised government.
One of them believed obstinately
trade unions became divided into two parts.
in the Marx-oriented idealogy and the others had a more realistic way of
thinking.
After the war, Japanese trade unions were reborn under the New Constitution
Unfortunately, the
which guarantees and protects the union's movement.
traditionally split schools of unionists remained the same, and in the period
In the l96Os, however,
during 1946 to 1955 things went from bad to worse.
Japan's general industrialisation changed the whole picture of trade unions'
The majority of 'unionists seek more realistic ways for settling
movement.
These recent unionists' movements
the problem between labourers and employers.
will be explained more in detail later.
Legislation
The Labour Standards Law, enforced in 1947, protects workers in such
rest days and annual
matters as: labour contract; wages; working hours;
The Trade
safety and hygiene, wonien and minor workers.
vacation with pay;
Union Law enacted in 1949, enabls the workers to bargain with their employer
on equal level.
The Labour Relations Adjustment Law, enforced in 1946, is aimed to promote
fair adjustment of labour relations and prevent or settle labour disputes, thereby contributing to the maintenance of industrial peace and economic development,.
- 132 -
Trade Union Structures and Organisations
There are four major central organisa-bions in Japan to which several nationwide trade 'unions belong.
These are the Japanese Confederation of Labour
(Domei), the General Council of Trade Unions of Japan (Sohyo), the National
Federation of Industrial Organisation (Shinsanbetse) and the Federation of
Independent Union (Ohuritsuroren).
Because of different idealogies that these organisations have as their
guide post, their relationship to political parties and their structural
differences, there have been few co-operative movements or inter-relationship
among them.
As I mentioned briefly before, Japan's recent industrialisation
has changed the whole aspect of our society.
Trade unions must respond to the new changes of labourer-employer relation
aid the challenge of reaching that goal of unifying by participation of various
unions for a common cause.
For example, the joint participation in the flV]P-JC
by various trade 'unions which belong to different nation-wide organisations
such as Domei, Sohyo.
Inter-Relations between Trade Unions and
Co-operatives
Trade unions have been closely related with co-operatives, especially with
co-operatives and housing co-operatives.
Although the agricultural
co-operative (Icokyo) is the biggest, influential body in Japan, there is little
relationship between the trade union and the Nokyo.
Historically speaking,
consumers' co-operatives have been union-oriented and were founded for the first
time by groups of workers for their betterment.
One of the typical existing consumers' co-operatives is the Consumers'
Livelihood Co-operative instituted within enterprise and financially supported
by company and trade union.
Housing co-operatives are fairly new bodies founded'recently for the
purpose of giving financial aid to have their own houses.
As housing shortage
is one of the most urgent problems in Japan and the creeping inflation puts
pressure upon the worker's life, these two co-c-operatives are expected to keep
a close tie with trade unions and the workers.
Puture Prospects of Trade Unions
Our immediate targets are as follows Prevention of public harm,
Safeguard against man-made and natural disaster,
Shortening of working hours,
Perfection of welfare,
Playing an important role in the international co-operation and aid
in Asia on the basis of the ILO concept.
To obtain these goals, unions must be strong enough to sway the Government
and public towards these listed, goals.
MALAYSIA
by
k. MIEZA and France.s SOOSAY*
Introduction
1.
(a)
Basic Economy
Malaysia's basic economy is primarily based on production of rubber,
followed by tin, timber, palm oil, iron ore, tin ore, canned pineapple,
The majority of these
coconut oil, and other miscellaneous products.
Further details are set out in Annex A.
products are being exported.
For local consumption the main agricultural product is padi.
(b)
Population
Malaysia has a population of 10 million people comprising of different
ethnic groups mainly Malays, Chinese, Indians and others, and they live
in peace and harmony and live and work together in different industries.
Part I
The co-operative movement was introduced into Malaysia by the Government
2..
At that time there was widespread indebtedness
in 1922 as a matter of policy.
amongst urban salary earners and the position was even worse in the rural areas
where the farmers and smallholders were firmly under the grip of money-lenders
In the absence of any institution catering for the financial
and shopkeepers.
needs of these people, they were forced to borrow from money-.lenders at
Many of us can remember vividly the days when
exhorbitan.t rates of interest.
money-lenders posted themselves outside offices on pay-days to pounce on their
The farmers in the rural areas depended on the village shopkeepers
victims.
for their credit and other requirements and made repayments with padi and other
crops valued at many times more than the amount borrowed by them.
To provide for the constitution and control of co-operative societies,
3.
the Go-operative Societies' Ordinance was promulgated in. 1922 on the lines o'
similar ordinance in force at that time in various states in India. Subsequently,
the law was amended in 1948 on the model provided for this purpose by the
Colonial Office in London.
Since then several amendments have been made to the
law to enable more effective control of co-operatives and to provide for the
rapid growth of the co-operative movement.
4.
With the introduction of the Co-operative Law the Co-operative Societies
Department (now known as Department for Cd-operative Development) was established
to promote the establishment and development of co-operative societies and also to
undertake the various functions provided for in the Co-operative Societies'
Ordinance.
The Registrar of Co-operative Societies is also concurrently the
Commissioner f or Co-operative Development.
5. The existing strength of the Department of Co-operative Development is
as follows:
183 field officers of all grades;
66 auditors;
84 members of clerical staff.
6.
Up to the time when Malaysia was involved in the Second World War in 1941,
the development of the co-operative movement was mainly concerned with the promotion
and development of urban co-operative thrift and loan societies and credit
The progress of the movement was halted during the
societies in the rural areas.
period of Japanese occupation of the country.
The movement began to refunction
Since the attainment of
after the war and several new societies established.
*The paper is a compilation of extracts taken from the individul country
statements prepared by these participants.
- 134 -
Today there
Independence in 1957, the movement has been progressing rapidly.
are 2,700 co-operatives of 30 different types with a total capital of over
Additional information on selected societies is set out in
$400,000,000.
Annex C.
Rural Co-operatives
Rural Cc-operative Credit Societies
There are 1,576 rural co-operative credit societies and the majoriy of
these societies are in the rice_growing areas of Kedah, Perlis, Province Wellesley,
Groups of such societies are formed into banking unions.
Perak and Malacca.
These societies have amembershipof over 70,000 and a capital of over $40,000,000.
Besides accumulating capital and granting loans to members, they also undertake
the supply of fertilizer to their members.
Seasonal 'Co-operative Credit Societies
These societies are formed among the poorest class of padi planters and
are converted into rural credit societies as soon as their members have improved
All loans granted by these societies are repayable at
their economic position.
harvest.
Processing and Marketing Societies
There are processing and marketing societies consisting of rice-milling
societies and unions, fishermen credit and marketing societies, rubber marketing
The ricesocieties, pineapple marketing societies, weavers' societies, etc.
milling societies mill padi for their members and retain bran for sale.
The
rice-milling unions undertake the marketing of padi produced by members of their
affiliated societies.
By means of such organised marketing of padi, the members
obtain a better return for their produce.
There are 85 fishermen's co-operative
credit and marketing societies and unions, with a total membership of 6,700 and
a capital of $2,379,971.
There are 30 rubber marketing societies and they have
a membership of 2,500 and a capital of $5,049,027.
In 1961 these societies sold
rubber valued at $2,500,000.
There is no doubt that by selling rubber through
their societies, the smaliholders obtain much better prices for their produce.
Banking Unions and Apex Bank
There are 21 co-operative banking unions and they are affiliated to the
Federation of Malaysia Rural Co-operative Apex Bank.
These banking unions
provide the necessary financial assistance to agriculturists through their member
societies and spread co-operative education among the rural people.
They
organise joint purchase and distribution of fertilizer to their member societies.
One thousand, foui hundred and fifty rural co-operative credit societies are
affiliated to these 21 co-operative banking unions.
The banking unions have a
capital of $5,300,000.
The Co-operative Apex Bank functions as an apex organisation for the
mobilisation of savings and credit and for financing the activities of farmers
and fishermen through the banking, milling and fishermen co-operative unions.
Twenty-nine such unions are members of the Apex Bank.
Its capital amounts to
$20,000,000.
In 1961, the Bank had granted loans totalling $10,000,000.
Apart from the societies mentioned above, there are various other tyes
of co-operative societies functioning in the rural areas, e.g. silversmith an
weavers' societies, fair and bazaar societies, electricity supply societies,
fertilizer and. paper industrial societies, farming societies, land purchase,
development and settlement societies, goat- and.cattle-breeding societies and
general purposes societies.
- 135 -
Urban Co-operatives
Thrift and Loan Societies
There are 165 co-operative thrift and loan societies with a membership
These societies serve as
of over 140,000 and a capital of over $150,000,000.
the backbone upon which other more advanced and complicated types of urban
They help to eradicate indebtedness among
co-operative ventures are formed.
members and educate them in the virtues of thrift, self-help, self-reliance, and
They also provide opportunity for many to gain valuable experience
forethought.
They serve as
in administration, in public speaking and in conducting meetings.
a source from which leaders emerge for voluntary service in the co-operative
Apart from providing opportunity for members to save regularly.,
movement.
these societies grant loans to them for various purposes.
ac-operative Housing Societies
Go-operative housing societies are self-help organisations endeavouring
to provide their members with suitable accommodation at reasonable cost and on
easy terms of payment.
The first co-operative housing society was registered in 1949 and today
there are 70 such societies in the country.
They have a membership of 40,000.
There are several problems confronting these societies but the important ones are
the lack of suitable building sites and adequate finance at reasonable rates of
Despite these difficulties, they have so far managed to have 5,000
interest.
houses erected for their members at a cost of $175,000,000.
The co-operative
housing societies are proud of the fact that they are the first institution in
the country to introduce the system of acquiring houses by the hire purchase
method.
With the constant improvement in education and in the standard of
living of the people, co-operative housing societies will become popular with
each passing year.
Malaysian Go-operative Insurance Society
This society has been making remarkable progress since it went into
business in May 1956.
The progress and stability of the society are a source
of inspiration to co-operatives.
Its sound and rapid growth demonstrates amply
that great things can be achieved through the co-operative method.
The society
has established itself as one of the leading insurance concerns in the country"
within so short a period of its existence.
The society is acquiring life insurance business for about $8,000,000
sum assured each month.
So far it has issued over 50,000 life policies for
over $150,000,000 sum assured.
Unlike other insurance companies, the policyholders of the society are members of the organisation, in the affairs of which
they have a say.
Policy-holders are elected to serve on the Board of Directors.
The policy of the society is to invest its accumulated funds, as far as possible,
for the development of the movement.
The society obtains re-insurance facilities from the Co-operative
Insurance Society, Manchester, on very favourable terms.
The 018 Manchester
provides assistance, advice and guidance.
Go-operative Central Bank
For many years in the past, co-operators felt the need for a co-operative
central financing institution for the urban sector of the movement.
In the past
many useful and necessary co-operative schemes had to be abandoned for want of
funds.
Although adequate funds were available within the movement, yet it was
not possible to utilise them due to the absence of a central co-operative banking
organisation.
After several repeated resolutions at many All-Malaya Go-operative
Conferences and after many years of careful planning, the Go-operative Gentral
Bank was established towards the end of 1958.
The Bank intends to assemble the
surplus funds available in the urban secor of the movement and to make use of
these funds for the promotion of new co-operative undertakings and also to provide
the existing co-operative societies with funds to increase their activities.
- 136 Seventy-two co-operative societies are members of this Bank and they have
taken up shares to the value of $2 million and also have placed over $3 million
The Bank has advanced over $3 million to
as fixed deposits for varying periods.
a number of oo-operative organisations.
More and more societies are realising the importance of the Bank to the
movement and there are indications that the Bank will receive substantial support
from member societies in the years to conie.
Co-operative Printing Press Society
The Malayan Co-operative Printing Press Society was established early
It proposes to provide co-operative societies with all their
this year.
printing and stationery requirements and also print the movement's publications
The societyts factory and office have been erected at a cost of $600,000.
The membership of the society is open to
co-operative societies and to individual co-operators.
It has just coi,w'enced operatioii.
Federation of Co-operative Housing
Societies
This organisation was formed in 1957 for the purpose of assisting the
growth of housing co-operatives by way of offering technical advice in the
It has a membership of 15 co-operative
day-to-day affairs of these societies.
housing societies.
Regional Co-operative Unions and the
Co-operative Union of Malaya
There are 5 regional co-operative unions operating in this country.
They help to co-ordinate the policies and activities of their member societies.
They organise annual co-operative conferences and impart co-operative education
These unions, together with 4 Malayan
amongst members of member societies.
wide secondary co-operative institutions (namely Malaysian Co-operative Insurance
Society, Malaysian Co-operative Tholesale Society Co-operative Central Bank
and Malaysian Co-operative Printing Press Society5 are affiliated to the
Co-operative Union of Malaysia, which is the national co-operative organisation
in the country.
The Co-operative Union of Malaysia represents the movement both
It is affiliated to the International Co-operative
within the country and abroad.
The Co-operative Union of Malaysia implements resolutions passed at the
Alliance.
It obtains scholarships and study tours for
All-Malaya Co-operative Conferences.
co-operators to study more of the movement in other countries.
Consumer Co-operatives
Co-operative Stores and Shops
The consumer co-operative societies are classified into 5 categories and
they are as follows:
societies in kampongs;
societies in new villages;
societies in urban areas;
societies in. places of employment;
and
societies with the object of making bulk purchase and distribution.
There
The majority of the consumer societies were formed between 1951 and 1953.
are 190 consumer co-operatives with a membership of 45,800 and a working capital
of
$3,800,000.
- 137 -
Malayn Co-operative Wholesale Society
The Malayan Co-operative Wholesale Society was established in 1949 for
the purpose of supplying consumer goods in 1ulk to the consumer co-operatives.
In 1965 its sales amounted to over $4,500,000.
Co-operation on Estates and Places of Employment
Employees' Co-operative Credit Societies
Employees' co-operative credit societies are formed amongst daily-paid
employees in government departments, on mines, plantations and other places of
There are 205 such societies with a membership of 17,000 and a
employment.
In 1965 they granted loans to members totalling
working capital of $6,144,900.
The savings in these societies
$1,500,000 for productive and necessary purposes.
are meant for old age and retirement.
National Land Finance Co-operative
Society
The years immediately following the attainment of independence saw a
large number of rubber estates being sold and fragmented into small units
This
resulting in the displacement of workers employed in the rubber industry.
caused considerable unemployment and unrest amongst the workers concerned.
In
order to mobilise capital from workers in the rubber industry and from others
interested in their welfare and in order to use the capital so mobilised for the
purchase of rubber estates which would otherwise be sold and fragmented, the
National Land Finance Society was formed in June 1960.
The authorised capital of the society is $10,000,000 divided into 100,000
The value of each share is $100 payable by monthly instalments of $10
shares.
each.
The membership of the society is 45,000 and the paid-up capital is $8,000,000.
The society receives deposits from co-operative societies, particularly from
co-operative credit societies on estates and in places of' employment.
The society
owns 20 plantations of rubber, palm oil and coconuts valued at $36,000,000.
It
provides group life insurance facilities for members.
Members' children are
provided with loans to enable them to undertake higher education.
General
Co-operative College of' Malaya
As the movement kept expanding at a fast rate and as more and more
different types of co-operative societies were formed, the need for an
institution to provide training facilities for co-operators on the various aspects
The Co-operative College of
of the co-operative movement was very strongly felt.
Since then several improvements and extensions
Malaya was established in 1956.
have been made to the College from funds provided by Government and by the movement.
The College provides training facilities for office-bearers and committee
members, internal auditors, village leaders, employees of co-operative societies,
new recruits to the Department of Co-operative Development and senior officers of
The College has at present room for training
a number of government departments.
of 150 resident students.
Educational and Social Activities
It sets aside about
The movement places great emphasis on education.
$400,000 each year from profits to provide scholarships to children of past and
present members and also to enable co-operators to take part in training courses,
- 138 -
specially arranged for them.
Selected representativea of the movement are being
regularly sent abroad to participate in co-operative seminars in international
co-operative conferences.
The movement donates liberally to several charitable and medical relief
organisatious.
The Lady Tenipler Hospital, Blind Children Homes, and other
welfare institutions in the country have been benefiting from donations made by
co-operative societies.
Co-operative Movement as an Avenue of
Employment
28. The movement spends about 3 ,500,000 annually by way of salaries,
allowances, bonuses and other benefits for its employees.
It has earned the
reputation of being a model employer.
With the rapid expansion that is now
taking place, the movement is steadily becoming a very good avenue of employment
for our people.
Relationship Between Trade Unions and Co-operatives
No permanent body of any sort exists at the moment to regulate the
relationship between trade unions and co-operatives.
Both the Malaysian Trades
Union Congress and the Co-operative Union of Malaysia have in recent years discussed
the desirability of having such a body created to facilitate collaboration between
the two movements on matters of common interest.
It is understood that JVITUC
and the Co-operative Union of Malaysia have set up committees in their respective
organisations to explore the possibilities and the extent to which such collaboration could be attained in the future.
Members of urban co-operatives and those on estates, mines and other
places of employment are also invariably members of trade unions.
With few
exceptions, the members of trade unions and co-operatives assist and support each
other.
Co-operatives appreciate the need to provide their employees with fair
and reasonable terms and, conditions of employment.
They therefore adopt the
salary and wage structures prescribed by trade unions for comparable employments
in so far as their employees are concerned.
In this respect cordial relationship
exists between trade unions and co-operatives.
Prospects of Future Collaboration
Co-operatives and trade unions could collaborate in the following fields
without any difficulty:
promotion of joint educational activities;
inclusion of co-operation as a subject in the training courses organised
for workers and Similarly trade unionism as a subject in the training
courses organised for co-operators;
exchange of publications between the two movements;
provide whenever necessary support for each others especially in matters
relating to legislation affecting both movements and in the matter of
obtaining assistance from Government.
Part II
Trade Unions
33. Unorganised labour movement existed pre-war under the auspices of Chinese
workers' guilds and during the period l938l92+l "self-help" associations functioned
- 139 -
The first trade union enactment came into
directly under communist influence.
After the end of
bein in the year 1940, but no trade union was registered.
Pacific war in September 1945 the communist-controlled General Labour Uniofl was
This organisation covered employees of all categories of workers.
In
formed.
1946 trade union enactment became compulsory and registration of unions started
in 1947, and by the end of that year 298 unions were registered with a total
In June 1948 th'e Trade Union Enactment was amended to
membership of 195,113.
provide for the registration of Pederation of Trade Unions which was required to
limit their membership to trade unions whose members were employed in similar
This not only assisted in facilitating
trades, occupations and industries.
collective bargaining, but also rendered some federations of trade unions, which
La.ter when
included unions in all trades and industries unregisterable.
the emergency was declared in 1948 the majority of these unions were dissolved
At the end of 1968 there were 260 registered unions with a
or ceased to exist.
total membership of 300,183,136 of these unions of workmen are the employees of
the Government with a total membership of 103,174.
Legislation
34.
The following legislations are at present in force:
Trade Union Ordinance 1959;
Trade Union Regulation 1959;
Trade Union Act 1965;
Trade Union Act 1967;
Essential Modification of the Trade Unions (Exemption of Public Officers)
Order 1967, Regulation 1969;
Essential Trade Unions'Regulation 1969.
force on 7 October 1969.
Legislations 5 and 6 came into
Model
With reference to the Industrial Oourts Bill and the Trade Union Bill
35.
of 1940, the Trade Dispute Ordinance of 1941 could be termed to be on
pattern.
It should be put on record these were not very well suited to Malaysian
conditions.
This is due to the fact that the total work force comprises of
three different ethnic racial groups with different cultural backgrounds.
General Description of Trade Unions
36.
The largest union in Malaysia is in the agricultural sector, namely the
National Union of Plantation Workers which is the largest in South-East Asia.
Mining, railway, bank, commercial, transport, governmental and quasi-government
unions and other private sectors are well organised and functioning well.
The
majority of these unions are affiliated with international bodies.
Many unions have formed co-operatives and are meeting the needs of
37.
members by forming co-operative stores, housing, etc.
The National Union of
Plantation Workers is the first to form a company and has bought a rubber estate.
Later it formed a multipurpose co-operative societ' and purchased another rubber
estate.
These two estates are well run
The War Department Oivilian Staff
Association is the second union which hs just purchased a rubber estate from the
co-operative fund.
It must be put on record that the majority of the big unins such as NtJPW,
bank, transport and many other unions have their own headquarters in the federal
capital with self-owned premises all over the states in Malaysia to look after the
interest of their members.
- 140 -
Inter-Relations Between Trade Unions
and Co-operatives
38. Foreward: Malaysia is proud to state that on 2 August 1966 this
important subject was discussed under the auspices of the Malaysian Trade Union
Congress at the University of Malaya which lasted up to 20 August 1966.
Thirty
participants from Australia, Ceylon, China (Taiwan), Fiji, India, Japan, Malaysia,
Korea, Philippines participated.
This seminar was opened by our present Prime
Minister.
Vice-Chancellor Ungku Aziz and many other eminent educationists and
top-ranking trade union leaders joined in the discussion which resulted in a
very fruitful outcome.
It is the individual trade union which started its co-operative sector.
The co-operatives operate independently without interference from the
union leadership.
Constant advice is given in its day-to-day running.
Financial:
members join voluntarily and pay their dues.
There is no
compulsion that a member of a union must join the co-operative.
Common Bodies: union member is independent, so is the co-operative member.
There is no common function
housing, thrift, credit, and consumer, etc. are now in operation to the
satisfaction of the members;
trade union acts as mother and briefs the members on the utility of the
co-operative movement.
No force is applied.
Members voluntarily join
the movement when convinced.
Both sections work as a team.
Prospects for Future of Co-operatives
and Trade Unions in the Country
(1)
(ii)
To consolidate the movement
to take all necessary steps, so that the Goverament would revoke
restrictive trade union enactment promulgated in. October 1969 which has
almost strangled the trade union movement in Malaysia.
Conclusion
39. It is relevant to record that the Malaysian trade union movement and
the co-operative movement have passed the stage of teething troubles.
It is
moving on the right lines and gaining momentum.
In gradual process minor
problems would be sorted out.
The future is bright.
NUPW, WDCSA, banking
and many other unions have paved the way and proved their foresight which are now
internationally recognised as model organisations in Asia.
Both the unions
and co-operatives while functioning independently are closely inter-related.
- 141 -
Annex A
Economy
Value Received
Millions
Exported Tons
Name of Product
Tho.isands
1 105
$1 301
86
820
1 505
182
Palm oil
295
131
Iron ore
5 087
110
1
9
Canned pineapple
66
1l8
Coconut oil
38
38
Rubber
Tin
Timber
Tin ore
565
Copra and miscellaneous
Total
V
204
These products are mainly exported to the United States, United Kingdom,
Communist China, Soviet Union, Japan, aud other European, Asian and African
countries.
Annex B
Population
West Malaysia
East Malaysia
Total
8 1/2 million
1 1/2 million
million
10
Number Employed
Primary
Agriculture and fisheries
(rubber, palm oil, coconut,
pineapple, cocoa, etc.)
Agriculture
Secondary
Tertiary
1 3/1I million
Mining
1/L1 million
Manufacturing
1/4 million
Miscellaneous
1/4 million
Trades and services
million
2
1/2
million
3 1/2
million
million
1
Unemployment
There are some 1/4 million people unemployed, but under new industrial and
land development scheme they would be gradually absorbed.
- 142 -
Annex C
Thrift and Credit
Societies
Particulars
Remarks
Agricultural Credit
To assist p.griculturists
and fishermen to buy
modern tools and equipment including fertilizer
(rural areas).
Government gave assistance
under development plan and
assisted by giving loan to
the sum of $30 million.
Rural Credit
Co-operatives
Membership 1,284
societies and 51
credit societies
57,424 members
To assist rural banking
unions and rural credit
societies (rural areas).
This society has n asset
of $14 million.
Government gave loan to assist
the society $5 million.
Thrift and Loan Cooperative Societies
Membership 161,048
Limited liability co-
Self-sufficient societies no government assistance
needed.
Help members for
housing, schoolin
facilities of children by
giving loan.
Employees' Co-opera-
Mostly formed in rural
areas in plantations to
help members by giving
loan when necessitated.
Self-sufficient - no
government aid is needed.
To assist small farmers,
Societies own asset
$6 million loan.
tive Credit Societies
182 societies
Membership 16,446
Processing, Farming
and Marketing
Societies
620 societies
Membership 54,004
Farmers' Co-operative
operatives normally in
urban areas.
rice millers, etc.
To
purchase modern farming
tools, fishermen's
trawlers, fishing boats
with diesel engines.
Only to assist fishermen.
Own capital $1/2 million.
Government gave loan
$1/b million.
To assist rural rice
millers.
Own capital $2 1/4 million.
Self-sufficient - no
government aid needed.
Co-operation between
wholesaler and small
retailers in rural areas,
Own share capital $1 1/2
million. Self-sufficient.
No government aid needed.
Credit and Marketing
Societies
86 societies
Membership 8,776
Rice-Milling
Societies
359 societies
Membership 54,004
Consumer Co-.
op er at ion
4 wholesale stores
To assist
173 retail societies
Membership 43,369
new villages, etc.
Multi-Purpose
Co-operatives
122 societies
Membership 22,770
To enable to purchase
estates, houses and to
engage in all aspects
in business sector.
Own asset $5 1/4 million.
Self-sufficient. No
government aid needed.
Housing Societies
To enable members to own
their own hOuses.
Mainly
in urban areas.
Own asset $5 1/2 million.
Self-sufficient.
No.
government aid needed.
65 societies
Membership 13,084
- 1143 -
Thrift and Credit
Societies
Particulars
Remarks
Transport and Taxi
To help rural inhabitants
to operate bus and taxi
services and to establish
own workshop for repairs,
Own share capital
l million sufficient.
No government aid needed.
36 societies
Membership 8,696
etc.
Insurance Society
1 society with 140
affiliates
Membership 42,015
To assist members to
insure life, accident,
medical, etc.
Own share capital
Government
$1 million.
Life insured
aid needed.
58 million.
Land Finance
1 society
Membership 60,100
To buy rubber estate, so
fragmentation may not
occur and workers being
put to hardship.
Own share capital
Self$11 million.
No governsufficient.
ment aid needed.
Banking Unions
To help members in giving
loan for exigencies, to
Own share capital
l million. SelfNo governsufficient.
19 societies
Membership 1,389
purchase houses, etc.
Bank Keriasama
Comprising 166
members
Societies 277
Unions 31
To assist members by
giving loan to start
Co-operative
Central Bank
To assist co-operative
societies financially
and to give aid to
members.
Own share capital $1 1/'-!-
To enable members to
purchase goods from
wholesale dealers.
Retails business.
Own share capital 2O,OOO.
No
Self-sufficient.
government aid needed.
To assist members by giving
loan to purchase jewellery,
redeem jewellery from pawn
shop, help members for
marriage expenses, to give
loan during festivities,
Own share capital
Selfl/2 million.
No governsufficient.
ment aid needed.
Membership 91
co-operative
societies plus
600 individuals
Co-operative Wholesale Society Ltd.
1 society with a
membership of 122
Co-operation
Among Women
98 societies
Membership 36,315
nient aid needed.
business, etc.
Own share capital
Self$1 million.
No governsufficient.
ment aid needed.
Sufficient.
million.
No government aid needed.
New Year celebration, etc.
Co-operative and
Education Society
4'
To give education to the
officers of the cooperatives in organisation,
accounting secretaryship
and general administration.
This is aided by t1.e
Government.
- 144 -
PAPUA AND ItEW GUINEA
by
G.D. COLLINS
Intro duct ion
The Trust Territory of New Guinea extends from the equator to 80 south
latitude, a distance of 400 nautical miles, and west to east from 1410 east
The land
longitude to 160° east longitude, a distance of 1,000 nautical miles.
area of the territory covers some 92,160 square miles and includes that part of
the island of New Guinea north of the border with Papua and east of the 141st
meridian of longitude, the islands of the :Bismarck Archipelago, of which New
Britain, New Ireland and Manus are the largest, and the two northern-most
islands of the Solomon group, namely, Buka and Bougainville.
The territory of Papua comprises the south-eastern part of the eastern
half of the main, island of New Guinea, together with the Trobriand, Woodlark,
D'Entrecasteaux and Louisiade island groups; it is separated from Australi,a by
The thost northerly point is the boundary with the Trust
Torres Strait.
Territory of New Guinea at 50 south latitude; the most southerly is Cape Baganowa
Prom west to east
in the Louisiade Archipelago, 11° 40 minutes south latitude.
the land areas of the territory extend from the middle of the waterway of the
Ply River at its most westerly point (this waterway forms part of the territory's
border with West Irian) to Rossel Island at 154° 14 minutes east longitude.
The extreme points thus lie more than 320 miles apart from north to south end
The total area is 86,100 square miles.
more than 930 miles from west to east.
There are 83,325 square miles of mainland and 2,775 square miles of islands.
The basis of the territory's economy is still primary production with
In 1967-68 agricultural products made up
agriculture the most important part.
approximately 85 per cent of the total value of exports of territory produce
Gold production
A timber industry is being developed.
(excluding re-exports).
Manufacturing industries are of growing
continued to decline in importance.
There are a number of
significance, and their establishment is fostered.
incentives, such as special taxation concessions (notably the Industrial
Development (Incentives to Pioneer Industries) Ordinance, 1965).
Although the economy is still largely dependent on copra and copra
More cocoa and coffee are being
products, it is becoming more diversified.
tea and palm-oil industries are being established; manufacturing
exported;
industries, as Well as service industries such as building and construction,
Intensive mineral
commerce and transport, are also developing rapidly.
exploration and investigation has established the presence of large low-grade
deposits of copper and gold-bearing areas.
The Conzinc Rio Tinto of Australia Copper Project has commenced
operations at Bougainville and will cost over $300 mil1ioi - a $1,000 million
Other
agreement has been signed for copper concentrates to Japanese refiners.
new secondary industries include the establishment of a glass-making and paper
packaging plant, assembling of cars together with a new brewery.
Figures covering the indigenous work force in Papua and New Guinea as
at 30 June 1968, and classified by industry groups and occupation groups ar
included in Annex B.
The main activity of the indigenous population is still subsistence
agriculture, but increasing numbers of New Guineans are growing cash crops or
The major cash crops produced by indigenous growers
export or for local sale.
for export continued to be copra, cocoa and coffee.
Increasing numbers of the indigenous people are now. raising livestock
and participating in timber production, mining, commerce, transport, manufacturing
The administration provides guidance in business manageand administration.
ment and in setting up business enterprises.
- 145 A large increase in the aimual grant from the Australian government in
9.
the post-war period has enabled substantial provision to be made for the longThere has been considerable expenditerm development needs of the territory.
In
ture on the detailed investigation of the territory's physical resources.
addition finance has been provided for capital ezpenditure on equipment and
These include
material and on facilities essential for economic expansion.
public works, power stations, water supplies, roads, aerodromes, wharves and
transport services.
Co-operatives
the
The first societies were formed in the years immediately followi
10.
Many of the
resumption of civil administration of the territory in 1945-46.
early societies were formed on the basis of existing informal but disorganised
Some were encouraged by christian missionaries,
clan and tribal entities.
The first annual report
others arose out of the activities of local leaders.
of the co-operatives section of the Department of District Services and Native
Affairs refers to the existence of 163 imown 1'co-operative" organisations, total
There has been an
membership and total subscribed capital from 1950 to 1969.
In the earlier years there was an
uneven growth in the movement since 1950.
In more recent years there has been a
increase in the numbers of societies.
great deal of diversification and increase in the complexity of the movement.
Early legislation provided for the registration of co-operative
11.
It
societies along the same lines as the system then in force in Australia.
was found that this was too sophisticated for all but a very few of the
Most of the duties imposed on the societies by the
territory's societies.
Co-operative Societies' Ordinance, 1950, were far beyond the capabilities of all
In 1952 the Native Economic Development Ordinance
but a handful of societies.
This provided corporate status, including limited liability, for
was passed.
any group of native people who complied with very simple registration procedures.
It gave considerable discretionary and supervisoiy powers to the Registrar.
Under this Ordinance a large number of societies were registered and supervised
until the present legislation, the Co-operatives Societies' Ordinance, 1965,
came into operation in 1967.
The present Ordinance provides corporate existence, with liability
12.
It imposes certain comlimited by shares, for societies registered under it.
pulsory rules on societies, roughly corresponding to the Rochdale principles as
follows:
one vote per member in general meetings;
limited return on capital;
limited individual shareholding.
Recent amendments to the Ordinance import a duty to contribute towards the cost
The Ordinanceprovides that a proportion of a
of co-operative education.
The
society's profits should be set aside and invested outside the society.
Ordinance gives the Registrar certain rights of inspection and powers of supervision, including the right to remove directors and dismiss employees.
The supervision of the movement is carried out by the Division of
13.
The Chief of
Co-operative Extension in the Department of Trade and Industry.
The field branch of
the Division is the Registrar of Co-operative Societies.
the Division is headed by the principal assistant registrar who has three
regional assistant registrars and about ninety co-operative officers und?r his
There is an audit and inspection group which at present consists of
control.
There is also a research officer and supporting clerical
six accountants.
The purpose of the Division is to assist as many people of the territory
staff.
as possible to take an active and personal part in the commercial life of the
territory through co-operation.
- 146 14. The Division's activities should be operating in two directions.
Firstly, it should be exploring avenues for expansion of the co-operative movement and econdly, it should be closely supervising existing societies and
ensuring that they remain active and healthy as long as there is any useful
purpose to be served by them.
Shortage of staff has made it necessary for the
Division to concentrate its activities on supervision of existing societies and
to actively discourage all but the most essential expansion.
15.
Most of the territory's co-operative societies are based on either a
single village or a closely associated group of villages.
Most societies -
run a "trade store" for the retailing of basic manufactured foodstuffs
and hardware;
purchase the cash crops of members for packaging, processing and marketing;
or
combine both of these functLons.
Until fairly recently the principal cash crop was copra.
More recently
societies have been handling coffee, cocoa, rice, peanuts and other tropical
agricultural products.
A few primary societies have been formed to cover a
much larger area than a few closely related villages.
These have all been
largely marketing societies.
16. There primary societies have had a largely hbconsumertt function, they
have combined resources to form associations whose purpose was the more efficient
purchase and distribution of consumer goods.
This purchasing and distribution
function has recently been taken over by the Co-operative Tholesale Society which
is wholly owned by the Apex organisation, the Federation of Co-operative Unions.
17.
Secondary societies have been formed to provide shipping, insurance
and investment services for primary societies.
There is no co-operative bank.
The Co-operative Investment Society has been formed to handle the inv?stments
of primary societies and to guarantee loans by banks to those societies needing
bank advances.
Annex A
Co-operatives in Papua and New Guinea
Year
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
98
119
110
153
191
209
236
227
235
234
232
232
258
283
295
310
317
330
337
349
Members
Capital
8 556
20 688
22 172
37 818
53 891
54 250
61 385
64 035
61 733
72 730
71 651
74 140
78 202
85 451
85 900
94 083
102 120
109 488
109 366
129 343
25 924
60 620
102 954
263 472
455 680
570 604
667 378
766 667
851 036
886 170
963 770
1 026 448
1 154 790
1 228 790
1 288 720
1 562 374
1 823 091
2 063 221
2 330 487
2 582 757
- 147 -
Trade Unions - Short History Beginning
with Informal Groups
The growth of informal groups concerned with the welfare of workers
It was during the hearings
generally commenced in the capital of Port Moresby.
of the Native Employment Board, a body created to advise the Administrator of
the Territory of Papua and New Guiiea on land matters, that a group known as the
Kerema Welfare Association appeared at hearings of the Board and submitted
evidence directed towards the introduction of any all-cash wage in the town of
This body was primarily established to look after the welfare
Port Moresby.
of Papuans from the Gulf Region and it naturally interested itself in the change
of employment conditions brought about by the growing industrialisation of the
It was from these hearings that the more advanced Papuars and New
town.
Guineans decided that there should be a true industrial organisation which could
appear before this Board and others and express the views of all workers and not
The Papua-New Guinea Workers' Association was formed
just the one association.
as a result of these representations.
At the same time, symptomatic with the changing outlook of Pa:puan and
New Guinean workers, a workers' association was in the process of formation at
In 1960 there was no legislation in Papua and New Guinea permitting
Madang.
Industrial organisations did, in fact,
or controlling industrial organisations.
An Employers' Pederation of Papua-New Guinea was established,
spread rapidly.
and workers' associations were formed not only at Port Moresby and Madang but
Other types of associations also followed,
soon afterwards at Iiae and Rabaul.
i.e. the Police Association of Papua-New Guinea and the Local Teachers'
The administration decided to go ahead with
Association of Papua-New Guinea.
the introduction of legislation and two ordinances were passed in 1962 and came
into force in 1963.
Industrial Legislation
The Industrial Relations Ordinance 1962-68 is designed to emphasise
that the informal settlement of disputes and conciliation and negotiation are
It provides for the formation
to be preferred to litigation or arbitration.
of industrial councils as a means of continuous joint consultation between
?mployers and employees.
The Industrial Relations Ordinance provides for processes of conciliaThe Ordinance
tion and negotiation which are available to both parties.
empowers the Administrator to establish ad hoc boards of inquiry and where an
industrial dispute exists or is apprehended, any matter connected with the
economic or industrial conditions of the territory which is involved in the
A board of inquiry
dispute may be referred to a board for inquiry and report.
consists of a chairman and at least three other members appointed by the
Administrator, of whom at least one must not be an officer of the Public Service
The Administrator is
of the territory or o± the commonwealth of Australia.
also empowered to establish arbitration tribunals to deal with industrial
disputes, the constitution of such tribunals being left for determination by the
Administrator in each particular case.
The Industrial Organisations' Ordinance 1962-67 provides for the
The Ordinance is intended
registration and control of industrial organisations.
to apply to all industrial organisations composed of not less than four employers
Registered industrial organisations and their officers
or twenty employees.
and members have immunity from civil suit when furtherance of an industrial
dispute leads to breach of contract of employment, interferes with the right of
some other person to dispose of his capital or of his labour as he wills, or
acts in restraint of trade; and members of industrial organisations are not
liable, to criminal prosecution for conspiracy or otherwise by reason only of the
Other
fact that the objects of the organisation are in restraint of trade.
provisions of the Ordinance relate to the constitution and rules of industrial
organisations and the amalgamation, federation and affiliation of registered
organisations.
Por a complete list of workers' associations in the territory of
Papua and New Guinea see Annex 0.
- 148 -
General Description of Trade Union Sbructures
'and Organisations at Various Levels and in
Various Sectors
As can be seen from the information provided in .Axinex C, workers'
associations formed in the -berritory of Papua and New Guinea cover a wide
divergence of occupations and industries; however, there are with very few
exceptions "all house organisations, i.e. workers employed in numerous ocoupaSome associations do, in fact,
tions are to be found within each association.
cover particular industries whilst others utilise branches within the general
framework of each association to cater specifically for the needs of particular
For example, some associations represent the building and construction
workers.
industries, while-b others represent waterside workers, teachers, public servants,
To the present stage workers on plantations have not as yet formed a
etc.
workers' association as they do not regard themselves as part of a permanent
work force for most of them return bo their villages after two years on a
The terms and conditions of em:ployment for these workers, ie.
plantation.
those not covered by industrial awards are to be found in the Native Emplotment
Ordinance.
There is yet no federation of Workers' associations in Papua and New
Guinea despite considerable assistance by the Department of Labour and
appreciable financial assistance from the Australian Vice-Council on Unions,
together with visits by both the President and Junior Vice-President of th
A number of meetings have been held by delegates representing
above Council.
the various associations throughout the territory; however, final agreement
It is anticipated
is yet to be reached on the establishment of a federation.
that such a body could come into being during the forthcoming year; however,
this will depend entirely on the support given to future meetings by the
respective workers' associations.
General Estimation of the Situation of
Trade Union Co-operatives
Difficulties involved in the development of industrial organisations
in the territory stems from the terrain of the country, socio-cultural problems,
the problem of illiteracy and the lack of any trade union background.
The terrain of Papua-New Guinea is well known for its rugged mountain
ranges, its fast-flowing but, with few exceptions, non-navigable rivers.
Communications are difficult and roads do not form any interconnecting network.
Indeed, it would be fair to say that many people have in Papua-New Guinea
travelled by plane but not by car.
Such conditions have contributed in no small
way to the segmentation of the population and a fiercely insular outlook - an
insularity which even divides the many so-called tribes.
It cannot be denied
that great numbers of people are still in a primitive state, for example,
sorcery and modern medicine are practised side by side.
Thile literacy is
becoming increasingly widespread, nevertheless, at workers' association meetings
the great majority of members can neither read nor write.
There is but little sign of a true national feeling.
It is more
important to be a member of a tribe than a New G-uinean.
Such insularity of
outlook was impressed in early workers' associations by a demand to be
represented in the executive committee on a tribal basis rather than by craft
or industry.
The Australian worker is born into a heritage of trade unionism.
Most Australians, even if not trade unionists themselves, have some concept of
trade unionism, of what it is all about.
They have some comprehension of the
organisation involved.
Collective bargaining, conciliation and arbitration are
not foreign to them.
Such a background is not present in Papua-New Guinea and
the lack of this background is a further difficulty complicated by the other
problems previously mentioned.
- 149 -
Other factors which have caused a certain amount of instability
30.
amongst workers' associations would include the high turnover of membership due
Also few
to the exceedingly transient nature of the bulk of the work force.
people with real skills join the workers' associations believing the association
Another matter which could be said to have hindered
has little to offer them.
In the main, workers'
development is the need for qualified officials.
associations utilise honorary officials and this does constitute a rathet'
irksome burden upon a man who is called upon to spend the bulk of his leisure
hours in association work.
Inter-Relations between Trade Unions and
Co-operatives
At the present time there is no inter-relationship existing between
31.
trade unions and co-operatives although members of the executive committee of
workers' associations are sometimes members of their local co-operative society.
It could be said that each group has concentrated on building up its respective
organisations and as such there has been no inter-relationship between the two
groups.
It is considered that serious consideration would need to be given in
32.
the future to the joint sponsoring of ventures involving both the co-ope*atives
Much
and workers' associations, particularly in the social and welfare field.
could be accomplished in a set-up of housing co-operatives and also to a limited
extent to the establishment of consumer co-operatives within major industrial
It is foreseen that with the establishment of an efficient
enterprises.
federation of workers' associations the degree of collaboration between
these two groups will be accentuated.
Prospects for the Future of Co-operatives
33. The co-operative movement is attempting to increase the over-all
awareness of national identity by strengthening the participation of individuals
It is
and individual societies in the nationalco-operative organisations.
hoped to form a co-operative marketing society to co-ordinate the marketing of
There is also an extensive programme of training extension
primary produce.
by means of which it is hoped to reduce the reliance of co-operative societies
This programme is being carried out with
on government technical assistance.
the help of ILO experts and with TJKDP financial assistance.
34.
The difficulties of the co-operative movement are mainly of three
kinds:
shortage of staff in the division of co-operative extension;
shortage of capital resources in the community;
conflicts between commercial aims and traditional cultures.
The division has never had suffioient staff either to train society
35.
employees to an adeQuate standard or to provide the degree of supervision made
As a result, a
necessary by the inadequate standard of society employees.
great deal of inefficiency and some dishonesty has reduced the effectiver4ess of
The standard of training of
societies in providing the services required.
It is hoped that a new co-operative college, to be
employees is improving.
There is no shortopened next year, will increase the rate of improvement.
term hope that the staffing problems of the division will decrease although an
intensive localisation programme utilising indigenous personnel is being undertaken as a long-term project designed to eventually overcome the staffing
impasse.
36.
The community does not have sufficient funds to provide capital for
With very few exceptions sacieties
all of the projects it wishes to carry out.
are undercapitalised and operate under all the disadvantages that shortage of
To
capital implies.
Again there is no short-term solution to this problem.
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151 -
produce new capital, successful operation of preseat ventures is essential.
Successful operation of present ventures is more difficult because of shqrtage
Assistance is being given by bank loans, guaranteed in some cases
of capital.
by the administration, but bank finance, with fixed interest charges, has many
disadvantages and cannot be a proper substitute for equity capital.
In many areas successful operation of any commercial venture is made
Many indigenous communities
more difficult by traditional cultural attitudes.
have very little idea of personal ownership of property and very strong ideas of
Therefore, the directors of a cothe importance of helping blood relatives.
operative society may not be willing to take any action against an employee who
They may, in
has been giving away society goods or money to his relatives.
In some areas, too, the motiive for
fact, see very little wrong in his action.
having a business is more a matter of prestige than a desire for commercial
Village trade stores in one area have been described as "commi*ial
success.
larders rather than business ventures.
Undoubtedly, the co-operative movement has made a greater
the economy of the territory than any other native-owned commercial
It has also had an effect, not readily measurable, on the )mowledge
thousands of indigenous people have of basic commercial concepts and
impaot on
enterprise.
that
methods.
Prospects for the Pu.ture of Trade Unions
It is absolutely essential for industrial peace in the territory of
Papua and New Guinea that viable employee and employer organisat ions are in
operation; however, as pointed out earlier in this statement much will hinge
on the formation of a federation of workers' associations which in turn will be
able to provide the necessary expertise in the presentation of association
claims for the over-all improvement of conditions of employment and the establishment of an intensive programme aimed at the education not only of the respective
executive committees, but in the field of worker education generally.
It is considered that workers' associations could well conoentrte
more of their efforts towards the inauguration of welfare schemes upon beaalf
of their members and their dependants.
Annex C
Industrial Organisat ions
Legislation, to ensure the creation of an atmosphere in which groups of
working people may exercise their skills, pursue their goals and resolve heir
conflicts through legitimate channels was introduced to the territory wit, the
advent of the 1962 Industrial Organisations Ordinance, in conjunction with the
Industrial Relations Ordinance of the same year.
4
The extract quoted hereunder from the Department of Labour's policy tatement, clearly indicates the policy of the administration concerning guidaice and
assistance offered in the formation and continuing development of workers P
associations within the territory.
The function of the Industrial Organisations Branch is to advise and train
workers in the foundation and management of industrial organisations and o
assist associations in the exchange of information and opinions.
Advice and assistance to industrial organisations is provided by inö4strial
organisations' officers who:
(a)
advise workers on the formation of industrial organisations and on
administration policy in relation to industrial matters;
- 152 (b)
train officers and members of workers' associations in management and
financial procedures;
Cc)
assist workers' associations with the exchange ofi information and opinions;
(d)
encourage and foster 'unity and good relations between workers who are
members of an organisation;
Ce)
encourage and develop social welfare activities within the workers'
associations; including such matters as self-help schemes and financial
assistance to members.
It must be emphasised that the industrial organisations officer does not,
of his own volition, promote industrial organisations, nor does he proffer
advice or guidance in the conduct of industrial claims.
Similarly he does not
attempt to influence an organisation, the quantum of salary or wages to be
claimed, nor the nature and variation of the conditions of service to be sought.
Certainly he may be called upon to explain the nature of certain conditions
applicable in another area.
But at no point does he indicate to an organisation
concerned, whether or not he considers such conditions of service or particular
salary structure are fair and appropriate; particularly within the circumstances
of the area covered by an organisation with wh±ch he may be dealing.
An employers' industrial organisation known as the Employers' Federation of
Papua-New Guinea was formed and registered in 1963, and had to 31 December 1969
been a party to fifty-six awards, with associated determinations, which were
negotiated with various workers' associations.
Twenty-seven employee industrial organisations had been established as at
31 December 1969 and their names and membership strength to that date were as
follows:
Indigenous
Abau District Workers' Association
Bank Officials' Association of Papua and
New Guinea
Bouainville Catholic Teacherst Association
Central District Building and Construction
Industry Workers' Union
Central District Watersicle Workers' Union
Goroka Workers' Association
Iiae Workers' Association
Local Teachers' Association
Madang Workers' Association
Manus District Workers' Association
Mime Bay District Workers' Association
New Ireland District Workers' Association
Northern District Workers' Association
Police Association of Papua and New Guinea
2
Port Moresby Workers' Association
Public Service Association of Papua-New Guinea
7
Rabaul Workers' Association
Senior Police Officers' Guild
Staff Association of Papua-New Guinea Institute
of Higher Technical Education
Staff Association of the University of
Papua-New Guinea
Timber Industry Workers' Association of
Wau-Bulolo
Western District Workers' Association
West Sepik District Workers' Union
Wewak Workers' Association
Western Highlands District Workers' Association
Airline Employees' Association of Papua-New Guinea
Bougainville Mining Workers' Union
73
12
323
350
369
304
195
331
348
271
394
150
184
Details unavailable
Total
73
137
149
323
350
369
20
32
304
215
32
331
348
271
394
150
66
2 250
2 835
10 257
-
422
401
-
1
32
402
32
(a)
(a)
101
115
93
208
199
173
64
303
1
200
2
32
481
34
3 218
17 866
1
51
173
65
303
481
14 547
(a)
Expatriate.
51
a
- 153 -
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- 154 -
SINGAPORE
by
Ngui KIAT CHUAN
Aziz bin MOHAMMED ZAKARIA
Chin HAN TONG, and
Ivan C. BAPTIST
Introduction
1.
Singapore, a fast developing nation with vibrant people who realise
what their goals are, is rapidly industrialising.
Her multiracial population
of 2,033 500 (estimate at December 1969) are engaged in various trades with
399,480 September 1969) workers divided into the following categories:
Agriculture, forestry, hunting and fishing
Mining and quarrying
Manufacture
Construction
Electricity, gas, water and sanitary
services
Commerce
Transport, storage and communication
Services
2 361
1
110
663
013
21 247
13 098
89 314
38 225
123 559
Singapore, the fourth largest port in the world, depends mainly on
entrept trade and the economic activities pertaining to the rubber and tin
industries of Malaya have been responsible for the unprecedented economic
prosperity especially during the fifties.
In 1968 the provisional revenue was S$788.74 million and the provisional expenditure (including a transfer of S$30.137 million to the Developmerit Fund) was S$698.52 million.
The total revenue included S$10.79 million
of non-recurrent receipts comprising S6.65 million in arrears of property tax
and S$4.14 million from the transfer of assets of the former City Council.
Singapore's external trade in 1968 was S$8,974.5 million, registering
an increase over that of the previous year by Sl,O77.4 million or 13.6 per
cent.
Co-operatives
History
Indebtedness forced groups of debtors together to free themselves
from debt.
These debtors, mainly wage earners in the middle and lower income
groups, were in the clutches of registered and unregistered money-lenders
because wages were barely sufficient to cope with contingencies.
At that
time, toQ, family obligations, customs and traditions demanded obedience without counting the expenses.
The absence of institutions, private finance
companies and bank facilities made borrowing from money-lenders almost
esentia1.
The solution to the problem of growing indebtedness of the
salary earner was the introduction of thrift and loan societies, which catered
mainly for the urban sector of the population.
This aspect of co-operation
still forms the bulk of the movement in Singapore.
The resporsibility of the
management of these co-operatives fell on the shoulders of honorary workers
who have got into the spirit of co-operative service.
The Singapore Government Servants' Co-operative Thrift and Loan Society Ltd. was the first
Singapore society to be registered, followed by the registration of the
Singapore Municipal Employees' Co-operative Thrift and Loan Society Ltd. on
8 October 1925 and, in 1928, by the Singapore Mercantile Co-operative Thrift
and Loan Society Ltd.
The movement gathered momentum in the urban areas
amongst the English-speaking groups and, by 1933, the need for a co-ordinating
body arose.
So the twelve thrift and loan societies formed into the
Singapore Urban Co-operative Union Ltd.
In 1942-1945, the war put a stop to
-
155 -
the functions of the co-operative movement but after the liberation most of the
In December 1948 the Singapore Governsocieties began operations once again.
It developed housing
ment Officers! Co-operative Housing Society was formed.
estates for government employees and is financed by long-term loans from the
Soon co-operation spread into the fields of co-operative
Singapore Government.
On 23 October 1957
stores, co-operative banking and co-operative insurance.
the Singapore Co-operative Bank, organised by the Singapore Co-operative Union
The main objective was to facilitate operations of
Ltd. was registered.
registered co-operative societies by being a central source of credit for the
co-operative movement in Singapore and to cater a depositing ground for monies
Due to organisational complications, the Bank
received from member societies.
Their needs
Rural dwellers were not forgotten.
is now under liquidation.
promoted the formulation of rural thrift and investment, credit, consumer,
By 1953 the vIUrban!r was
producer, marketing and general purpose societies.
dropped and the Singapore Co-operative Union emerged because of the need to
In 1958 the union affiliated with the
integrate the rural and urban movements.
International Co-operative Alliance in London.
Legislation
The promulgation of Co-operative Societies' Ordinance in '1925 was
6.
In 1929
initiated by Mr. Alexander Cavendish, a Malayan civil servant.
Mr. C. Strickland of the Indian Civil Service, previously Registrar of Cooperatives, Punjab, India, visited Singapore and studied the co-operative moveHis conclusions in a report published that year were in the form of
ment here.
recommendations that were largely adopted.
7. Naturally, the co-operative legislation in Singapore is based on conThere is a single
cepts and institutional principles of the' British system.
It is provided by the Co-operative
national co-operative legislation.
Societies' Ordinance which is based on a law enacted in 1924 and which cane into
The' Co-operative
force on 1 January 1925 and was amended and revised in 1953.
Society Rules, 1925, amended in 1953, are the executive and subsidiary adjuncts
to the Ordinance and contain the administrative procedures consisting of eleven
main sections briefly divided as follows:
(1
(ii
(iii
(iv
(v
(vi
(vii
(viii
(ix
(x.
(xi
preliminary
registration
duties and privileges of societies
rights and liabilities of members
property and funds of registered societies
audit, inspection and inquiry
dissolution
surcharge and attachment
dispute
rules
miscellaneous
8. Representations were continuously and vigoroucly made to the Registrar
of Co-operative Societies in respect of the rate of the Statutory Reserve Fund
The
of established societies to be redtLced from 25 per cent of the net profit.
following concessions were approved in 1954:
after ten years of registration, thrift and loan societies need not
contribute annially more than one-tenth of the net profit to the Reserve
Fund;
after its fifth year, if the Reserve Fund has reached 6 per cent or more
of the subscription capital, the annual contribution may be reduced to
10 per cent;
after the tenth year, when the Reserve Fund is between 8 and 10 per cent
of the subscription capital, the annual appropriation shall be 7 1/2 per
cent of the net profit;
where the Reserve Fund exceeds 10 per cent of the subscription capital,
the annual appropriation shall be S per cent.
- 156 government Department (Structure and
Function)
9. Under the Ordinance, the Minister may appoint a Registrar of Cooperative Societies and his assistants to register such societies with objects
for the promotion of economic interests of the members.
He is not merely a
registering officer but is also expected to provide promotion, registration,
supervision, inspection, audit, assistance counsel, control and liquidation of
the co-operatives in Singapore.
On him rests the responsibility to see that a
society starts and develops under healthy and favourable conditions.
G-eneral Estimation of the Situation of
Co-operatives in Different Fields
10.
The following figures will show the progress o± the co-operative movement in Singapore.
In 1947 there were 37 societies with a membership of 13, 300
and a working capital of $1,310,000.
By 1966 there were 104 societies with
membership of 54,764 and a working capital of $29,024,310.
To date, the
membership stands at 55,000 and the working capital between $35-40 million in 94
societies.
Classification of Co-operatives in Singapore
Thrift and loan
Employers' Credit
Thrift and Investment
Consumers
Marketing
Rural Credit
Housing
Co-operative Bank
Co-operative Union
Miscellaneous
1964
1965
1966
1967
1968
44
44
8
22
14
43
44
41
8
8
21
11
20
11
5
4
4
4
4
4
15
12
4
3
3
3
3
3
2
2
2
2
1
1
5
1
1
1
1
5
7
7
7
108
108
10.4
104
96
9
21
15
5
3
3
Total
9
Trade Unions
History
11.
The history of the Chinese and Indian immigration to Singapore is closely
tied up with the history of the trade union movement in Singapore.
The Chinese,
making up 80 per cent of Singapore's population today, were the first to form
labour organisations.
As early as 1823, they brought with them the "hong" or
guilds.
The Chinese secret societies - "Aimg Hoay", "Toh Peh Kong", "Hai San"
and others - often formed part of the guilds.
During 1920 many societies took
functions of trade unions and, in 1939, 70 such unions formed into the
Federation of Trade Unions under the auspices of the Malayan Communist Party.
This Federation, during the Second World War, organised "Dalforce" - an underground resistance unit which fought the Japanese.
The Indians made little
effort to form labour assoctations until shortly before the Second World War, but
even then, these did not develop along traditional trade union lines.
Partly b,
choice but mainly for cultural, socio-economical and political reasons, the
Malaya remained outside the labour movement.
However, as some of them became
urbanised, they were gradually drawn into labour organisations.
During the
occupation, there were no trade union activities.
But after the war, the
labour movement purported to have a membership of 200,000.
The period prior to
1957 may be termed the period of struggle against colonial government with the
communist unions creating industrial chaos by waves of strikes.
The period
between 1960 and 1964 was the period of struggle between the Socialist Peoples'
Action Party and the pro-communist Barisan Socialis and this struggle was fought
out even in the trade union movement and the outcome was the split of the trade
- 157 -
union movernenu into the National Trades Union Congress representing noncommunist unions and the Singapore Association of Trade Unions representing the
From 1964 the trade union movement saw a decline in
procommunist unions,
This necessitated some soulsesxching by the leaders of the trade
membership.
unions and they met from 16-19 November 1969 at the Seminar on the Modernisation
This seminar saw the leaders of the affiliates of the
of the Labour Movement.
National Trades Union Congress endorsing in a single thundering voice the
The aftermath of this
recommendations of the four days of deliberations.
seminar will decide the success or failure of the labour movement in Singapore.
The main recommendations were for the labour movement to recognise their full
responsibility, coequal with government and management, for the survival of
their country and to reorganise, recruit, retain and revitalise the trade iiion
movement by creating new, massive millionaire financing through cooperative
schemes executed on a nationwide base, by increasing union dues to a flat rate
of 1 per cent, to a maximum of $6, of member& salaries to finance these cooperative ventures, by building a workers' college and by 1eginning a high
powered recruitment campaign amongst the four out of five workers waiting to be
These recommendations were ratified at the Delegates' Oonferene of
organised.
the NT[J
in April 1970.
Legislation
It was first
Generally, the legislation follows the British pattern.
The right of groups to
introduced for the registration of societies in 1889.
form associations was accorded fuller recognition by the Singapore Societies'
However, apart from rare exceptions, the organisation of
Ordinance of 1909.
First trade union legislation
employees was not recognised until after 1920.
But actual registration began after the Second
was introdixced only in 1940.
World War.
Today in Singapore there are several ordinances that cater for the
We consider that our welfare and social
welfare oi the working population.
legislation is one of the best in this part of the world.
But the recent Employment Act (1968) has certain anomalies that will
have to be ironed out, and so has the Industrial Relations (Amendment) Act (1968).
The following are the main Ordinances that form legislation for the
workers and employers:
(1)
the Trade Unions' Ordinance (1941) - an Ordinance to provide for the
This Ordinance also carries a
registration and control of trade unions.
number of amendments;
the Workmen's Compensation Ordinance (1955) - it provides for the payment
of compensation by employers to workmen who sLtstain injuries through
accidents arising out of and in the course of employment and to workmen's
dependants in cases of fatal injuries;
the Central Provident Fund Ordinance (1957) (Amendment) Act (1968) and
Amendment Act (1969) - it provides for compulsory saving by the employee
who is made to contribute a small portion of his monthly salary toward
the Fund whilst his employer, too, has to make an extra contribution oçi
The Amendment Act, 1968, increased the rate of contribution
his behalf.
from 5 per cent to 6 1/2 per cent and the maximum contribution from $25
Another major amendment enables membes
per mensem to $150 per mensem.
of the Fund to use their savings for the purchase of houses or flats for
The Amendment Act, 1969, increased the rate of
their own occupation.
contribution from 6 1/2 per cent to 8 per cent;
the Employment Agency Ordinance (1958) - private employment agencies are
required to apply for a licence from the Commissioner for Labour only in
specialised
artistes;
respect of the following types of employment:
or secretarial and clerical
professional and scientific services;
services;
the Factories Ordinance (1958) - ensures that the safety, health and
welfare of factory workers are taken care of by the Factories Inspectoaiate;
- 158 the Seamen's Ordinance
industrial relations;
(1956) -
the Trade Disputes Ordinance
dealing with seamen's welfare and
(1941) -
the Industrial Relations Ordinance (1960) and Amendment Act (1968) - to
provide for the regulations of relations of employers and employees and.
the prevention and settlement of trade disputes by collective bargaining
and conciliation and arbitration,
The Amendment Act reduced the scope
of collective bargaining and restricted the jurisdiction of the
Industrial Arbitration Court in the determination of a trade dispute;
the Regulations
(1965) (1968) - requires
f Employment Act
the Redundancy Payment Act
employers to put all
redundancy payments of their employees into a fund.
The purpose of the
fund is to conserve to the best advantage of the employees all redundancy
payments payable by employers to those of their employees who are diLscharged from employment;
the Employment Act (1968) - this Ac repealed the Labour Ordinance (1955),
the Shop Assistants' Employment Ordinance (1957) and the Clerks' Employinent Ordinance (1957).
It contains provisions governing conditions of
service, working eoxidltions and administrative provisions.
General Description of Trade Unions'
Structures and Organisations
The Singapore Trade Union Movement adopts a three-level structure national, branch and works level.
The lower bodies carry out decisions of the
higher ones.
At national level, the supreme authority of the Congress is the
Delegates' Conference which is annual or extraordinary.
The Conference is represented by the delegates from affiliated unions and elects its representatives
to the Central Committee once every three years.
The Central Committee comprises 25 members.
At affiliate level all unions have annual general meetings
but could elect representatives to the Executive Council at intervals of' three
years or less, depending on their constitutions.
Annex E clearly illustrates the structure of the trade union movement
in Singapore.
General Estimation of the Situation of
Trade Union Co-operatives in Different
Fields
The National Trades Union Congress has launched into two aspects of
co-operatives, the first being INCOME, a life insurance co-operative, with a
capital of more than S$l million wholly contributed by trade unions and cooperatives and a high-powered organisation team led by Mr. A.T. Shimpi, the
General Manager, and assisted by top trade union leaders from affiliated unions.
The groundwork was put in by Professor Tom Elliot and the Secretary-General
(NTUC), Mr. Devan Nair.
Dr. Goh Keng Swee, Singapore's Defence Minister, is
the Chairman of' the Board of Trustees.
The Income Development Organisatioia a sales development committee, has also been set up to deal with sales promotion.
The IJJO comprises active trade union leaders from the affiliates and. plans on an
effective sales campaign.
The first life insurance policy will be sold by
December this year and a mass rally is to be held in November 1970 at the
Victoria Theatre to boost its sales promotion.
In addition, more than 100 trade
unionists are attending a sales promotion course to give them a thorough knclwledge of INCOME's prospectus.
The second co-operative project is COMFORT, a workers' transport aoThis SiO million project will run (1,000) taxi and (200) minibus
The buses will alleviate the transport problems faced by parents in
Singapore where transportation of their children to and from school is concerned.
It will also probably mean cheaper rates for trade union members affiliated to
the NTUC.
Jobs will also be provided for many a Singaporean, as the runnirg of
these buses and taxis require drivers and conductors.
COMFORT should be in full
operation early next year.
operative.
services.
- 159 -
Immediately the NTTJC plans to run dental cooper.atives and later
20.
embark on consumer co-operatives and has other tentative schemes wider considerati on.
Inter-Relations Between Trade Unions and Co-operatives
Inter-Relations
Although the trade union movement and the co-operative movement are
21.
two distinct bodies, most of the officials Of the co-operative societies ar also
Many union members also belong to the variois ccactive trade union officials.
The ideals and motivation of these two organisations in
operative societies.
Singapore are somewhat similar in that they aim to raise the economic well-being
Both are also democratically controlled by mainly part-iiime
of their members.
honorary officers elected by the members.
In the recent co-operative venture of the National Trades Union Congress
22.
This af±inity that
many cc-operatives came forward to buy shares in INCOME.
exists between trade unions and co-operatives in Singapore is one we are proud of.
Type of Co-operative Especially Apt for
Joint Sponsoring by Trade Unions and Cooperatives
23.
(i)
Where housing is concerned the Housing Development Board i
doing an excellent job of constructing flats for Singaporens
In addition, co-operative buildat a relatively cheap price.
However, this
.ing societies are in existence in Singapore.
could be a successful joint venture if the trade unions and cooperatives were to sponsor a housing co-operative to provide
very low-cost housing for those workers who are unable to afford
the rents for housing board flats;
the insurance co-operative would be worth while sponsoring but,
as mentioned earlier, the co-operatives did support the trade
unions by purchasing shares in INCOME;
industrial co-operatives should be the most apt for joint sponsoring because there has been relatively no major operation going
The only co-operative that exists at the
on in that field.
present moment is the ex-political detainees' small-scale
In the context of Singapore, too, a
industrial co-operation.
rapidly industrialising republic, industrial co-operatives would
be most successful.
Collaboration
But
At present, the two movements are collaborating on a small scale.
24.
it appears that, soon, the two movements will be working together very cloely.
Prospects for Future of Co-operatives and
Trade Unions in Singapore
Immediate Goals for Co-operatives and
Plans to Reach Them
The co-operative movement in Singapore is seeking to diversify its, co25.
At present, legislation is preventing co-operatives from
operative activities.
For example, thrift and credit
moving outside their registered fields.
societies cannot venture into industrial co-operatives and housing co-operatives
Yet another goal for the cocannot venture into insurance co-operatives.
operatives is the setting up of a cc-operative bank to facilitate the smooth
- 160 -
flowiTg of transactions.
It is really unfortunate that the co-operative bank
which should be an asset to the co-operative movement is now facing liquidation.
Immediate Goals for Trade Unions and Plans
to Reach Them
26.
These goals have been spelled out very clearly by the recommendatjons
of the Modernisation o± the Labour Movement Seminar.
They are:
to strengthen the multiracial state of Singapore and the labour movenient;
to increase productivity of the workers;
to increase the financial resources of the trade union movement;
to educate for leadership in the movement;
to have workers' participation in management;
to form co-operatives and run them effectively;
to revitalise the movement by organising the imorganised.
The plans have been laid down and the movement is looking ahead.
The cooperative ventures will soon materialise and effective committees have been set
up to deal with various aspects of organising INCOME.
The INCOME Development
Organisation is planning massive sales campaigns.
Where the other goals are concerned, special committees have been set to
examine and lay down blueprints for effective implementation.
In the words of the
Secretary-General, National Trades Union Congress, Mr. Devan Nair:
calls,
in the first instance, for the setting up of a special modernisation campaign
committee with detailed terms of reference whose job would be to emba±k on an
educational campaign, use of mass media, radio, TV, publicity meetings of trade
unions at branch level, general meetings
Secondly, we have also recommended certain immediate measures which might be
taken to prove to the ground that we mean business clearly illustrates the
ambitions of the brain-ignited trade unionists in the Republic.
Difficulties, Failures and Successes
of Cc-operativ'es
27.
In the co-operative movement, as mentioned earlier, legislation ties
the movement down.
Strangely, there has been no change of legislation since
1953.
In addition, a sizeable percentage of the co-operatives' profits goes to
the Reserve Fund.
This accrues no interest and is a barricade for investments
into other fields of co-operation.
This reserve remaining idle is also of nd
benefit to the members and little benefit to the society.
It would be a booi to
the cc-operatives if a large portion of this Reserve Fund could be released.
28.
A failure is the Co-operative Bank now under liquidation because of
operational inactivities.
This was dealt with in the statement earlier.
It would be wrong to say that the co-operative movement is degenerating
29.
because of the barriers facing it and the unfortunate failures it has faced.
The
increase in membership and finance is a clear indication that the movement is
prospering.
Difficulties, Failures and Successes of
Trade Unions
30.
The trade union movement has its bugbears.
The workers' comatose
attitude has been allowed to develop over the years through a very significant
lack of activities in the unions.
Legislation here has also caused dissatisfaction
and the Employment Act, 1968, and the Industrial Relations Amendment Act, 1968,
were partly contributory to the complacency of the members.
The usual questions
asked by union members have been:
- 161 -
What can the union do for me now?"
"Why should I continue to pay dues when non-members enjoy similar benefits
as members?"
But
Criticism of NTUC leadership has not always been well-founded.
31.
since the modernisation seminar there has been a continuous dialogue between
leaders which has brought about a better understanding of the programmes and
In fact, trade union figures have in the last
policies of the national centre.
But much remains to be done, in particuar,
few months shown an upward trend.
to organise unorganised labour.
The major failure of the movement in Singapore is the apparent inability
32.
Several
to organise more than the average of 2 per cent of the labour force.
reasons may be attributed to this low figure in the organised labour force:
difficulty in organising contract labour, family or extended family
businesses and other small unit enterprises;
inactivity of NTUC affiliates to recruit new members.
Because the majority of leaders in the movement are part-timers in the
33.
sense that they are full-time employees in some industrial, commercial or
Others who
statutory undertakings, the lack of commitment is clearly envisaged.
Such a state
are full-timers are normally involved in a multiplicity of roles.
of affairs leaves room for doubt as to the time and energy that a leader has for
his rank and file.
The trade union movement is most fortunate in that the new leadership
34.
Those from
in the NTUO is forging ahead to lop off the inadequacies existing.
the old school have been made to realise through the great Modernisation of the
The success of the
Labour Movement Seminar that the movement needs capital.
movement is imminent provided it can keep up the pace set after the seminar,
turn blueprints into reality and retain dedicated and true-blue leaders while
ejecting the individualistic, the work-shy and mentally flabby ones.
- 162 -
Annex A
Total Labour Forces Employment, Unenrployment
and Union Membership
Year
Labour Force
(000)
EmDloyxnent
000)
Unemployment
Union
(000
(000)
1957
471.6
448.6
23.0
140.7
1958
481.4
428.4
53.0
129.1
1959
491.3
426.3
65.0
146.3
1960
500.2
432.6
67.6
144.7
1961
511.2
434.5
76.7
164.4
1962
525.6
445.1
80.5
189.0
1963
540.7
465.0
75.7
142.9
1964
556.7
479.6
77.1
157.0
1965
573.0
502.4
70.6
154.0
1966
576.6
523.0
53.0
141.9
Annex B
Estimate of Gross Domestic Expenditure
and Per Capita Income
1966-1968
Period
Gross Domestic
Expenditure
(at current prices)
% increase
over Previous
Year
$
Per Capita
Income
Increase Over
Previous Year
$
1966
3 255.0 million
6.2
1 701
197
3 578.7
9.9
1 830
7.6
1968
3 959.9
10.6
1 992
8.8
"
3.5
Average annual rate of growth
at current prices for the past
3 3lears - 1966-1968
8.9
6.6
Average annual rate of growth
at current prices for the past
8 years - 1961-1968
8.6
6.0
4,
- 163 -
Annex C
Union Membership by Affiliation
October 1964 to June 1969
National Trade
Union Congress
Stpore Assocs.
of Trade Unions
Year
Oct.
1964
36 237
64.64
113 754
73.84
77.93
71.45
19 384 12.33 157 297
9 084 5.90 154 052
3.09 141 925
4 372
22 400 17.23 lO 053
73.78
19 815
15.78
74.34
18 559
15.23 ll 854
1966
26 938
14 722
18.98
110 615
11.32
13 097
12 710
10.44
10.43
92 931
92 606
June 1969
No.,
101 676
31 214
1968
!1ota1
No.
23.03
20.26
1965
1967
Independent
No.
No.
9.0 585
125 518
Annex D
Industrial Relations Wok Stoppages and ManDays Lost
No. of ManDay
Year
No. of Work Stoppages
1961
116
410 889
1962
88
165 124
1963
47
388 219
1964
39
35 908
1965
30
45 800
1966
14
44 762
1967
10
41 322
1968 (Jan. to July)
2
(Aug. to Dec.)
2
1969 (Jan. to June)
(Jan. to July)
4
Nil
(Aug. to Dec.)
723
10
724
11 447
Nil
Lost
- 164 -
Annex E
Union Structure and Relationship to the National Centre
(The structure of the NTUC's unions and other relationship to the national centre
may be gauged in the model below):
A MODEL UNIONISM OF SINGAPORE
STRUCTURE
Authority Down
Envi romn ent
Economy
Party
Government
Rivals
International
Authority Up
CENTRE
General Policies
Deal Government
Research Negotiation
Arbitration
Communication
OFF ICERS
RESEARCH
CENTRAL COUNCIL
CONFERENCE
eview union headquarters bargainl
Ling aids implement policies dues,
Iassessments aid in union rivalry
I
I
------J
Delegates
Ele otions
Policies
Dues
Affiliation
UNION HEADQUARTERS
OFFICERS
EXECUTLVE CONMITTEE
CONFERENCE
Industries
(rival union)
Policies
Negotiations
Policies
Arbitration
Services
Organise
Political Action
Elect Representatives
/
/
/
TSupervise branch
Conduct negotiations
Bargaining tactics
I
Arbitration use
Government machinery
I
Respond rivalries
DELEGATES
ELECT IONS
POLICIES
DUES
AFFILIATION
I
Bargaining
Employer
Shop relations
BRANCH
OFFICERS
(rival union)
7
Organise
Guide
Aid
Organi sing
Political Action
Elect Representatives
ANEIJAL MEETING
¼
Elect
Branch
Participation
MEMBERS' DYNAMICS
Note:
Broken lines and arrows denote that in some smaller unions the branch is
also the union headquarters.
- 165 -
PHILIPPINES
by
H.S. REGALk*
J.R. VELOSO*
D.C. PUNZALAIN*
I.
Introduction - General information
The Republic of the Philippines lies 600 miles from the southern coast
To its north lies Formosa, to ts
of Asia and. 15 degrees north of the Equator.
south Borneo, to its east the Pacific Ocean and to its west the China Sea.
The
The total land area of the Philippines is 116,220 square miles.
country is almost equal the size of Italy, a little bigger than the United
The islands and islets comprising the
Kingdom and a little smaller than Japan.
Eleven islands make up 96 per cent of the total land
archipelago number 7,107.
Luzon is the largest with 40,814 square miles, followed by Mindanao with
area0
The Philippines stretches 1,150 miles from north to south
36,906 square miles0
and. has a coastline (10,850 statute miles) that is twice the length of that of
The southernmost island is Tawi-tawi which is
the United States of America.
only 14 miles from Borneo and the northernmost is Batanes which is 100 miles from
Formosa.
There are some 37 million Filipinos as per the 1970 census and the
The birth rate
population is increasing at the rate of 3.2 per cent annually.
is expected to be around 47 births per thousand for the years 1960-1970, while the
death rate is expected to be around 13 deaths per thousand between 1965-1970.
Agriculture in the Philippines employs nearly two-thirds of the countryts
The country produced some 4.789 million metric tons of
total labour force.
palay (rough rice) in 1968 exceeding for the first time the total requirement of
The
The country grows its own corn.
4,757 million metric tons of this cereal,
Copra has maintained its
country's principal exports are copra and sugar.
The total
position as a major earner of foreign exchange since the last war.
The United States of
aggregate of copra exports in 1968 was valued at $235,978.
America, Federal Republic of Germany, Japan and Netherlands in that order are the
Sugar on the other hand as one of the mainstays of
biggest importers of copra.
the Philippine economy has a total aggregate capital investment of around
Some 3 million people are totally dependent on the sugar industry
$800 million.
In 1968, about 318,300 hectares of land were planted to
for their livelihood,
Sugar exports in 1968 amounted to $144 million or 17 per cent of
sugar-cane.
the total exports for that year.
The average rice yield per
Rice is the staple food of the Filipinos.
heotare in 1968 was 32.9 cavans, which is one of the lowest of the riceThis low yield has been attributed to
producing countries in South-East Asia.
It is expected, however,
several factors, one of them is the lack of irrigation.
that self-sufficiency in rice can be fully attained with the several government
and private agencies involved in extensive rice research programmes.
Next to rice, fish is the most important element in the Filipino diet.
Some 2,000 species of fish abound the Philippine waters with sardines, mackerel,
Per caita
tuna, bonito millet, milkfish and sea bass among the most important.
In the same year, fish imports
fish production was roughly 25.4 kilos in 1968.
Of the more than 938,000 metric tons of
averaged about $2 million every month.
fish produced in the Philippines in 1968, valued at more than P$l,362 million, about
For the ten principal exports and
87,000 metric tons came from fish-ponds.
imports of the Philippines, please see Annexes A and B.
Under the present four-year economic development programme of the
Philippines, there is the issue of reconciling economic goals with social
Thus the strategy of integrating traditional and modern
development goals.
*The present paper is a compilation of extracts taken from the individual
country statements prepared by these participants.
166 -
sectors lays stress on reduction of unemployment and underemployment, emphasis
In this respect, the
being placed on promotion of employment opportunities.
Board of Investments considers employment-creation potentials as one of the factors
in determining investment priorities in industries.
The infrastructure programme to hasten the pace of economic activity
3,
Likewise, the target for
seeks to raise depressed farm employment, and income.
raising national and per capita income levels is geared towards the requirements
Education and manpower development goals
of the rapidly growing population.
seriously consider appropriate schemes of incentives to minimise or substitute
for profit motives.
The Philippines has been faced with several problems in the planning
Despite a current plan of economic development, and nearly fifteen
process.
economic development plans developed in the past, none of the national plans
find their way into legislative enactment and implementation.
Because of the incipient pace of its economic development the economic
programme drawn up in 1965 was able to project an increase in annual employment
of only 303,000 for 1967 to 1972.
In 1969, the revised programme because of
the accelerated rate of economic growth, was able to foresee an annual increase
of 1,514,000 new jobs between 1967 and 1972.
Agriculture will furnish
57.2 per cent of these new jobs, and non-agriculture, the other 42.8 per cent0
Unemployment is likewise calculated to drop from the 1967 level of 7.7 per cent
to 7.4 per cent in 1972.
(Source: Report on the Asia Round Table on Labour
Administration and Development Planning, Manila, 2-11 September 1969.)
(Figures on population and on employment by sectors are attached hereto as
Appendix A.)
Co-operatives
The practice of mutual helpfulness has always been deeply engrained
in the consciousness of the Filipino people.
It is in their blood and is a great
part of their lives, born out of necessity and developed through centurie of
tribal and later communal living.
It is interwoven in the fabric of their habits
and their customs.
Even today it manifests itself in the palusong (mutual help
ploughing, planting and harvesting among farmers) and in the bayanihan (mutual in
help).
These practices together with strong family ties and deep religious
tendencies provided fertile ground for sowing the co-operative movement in the
Philippines.
History and Legislation
In the Philippines, particularly between 1907 and 1947, there had been
major attempts to promote and organise co-operatives.
During this span of forty
years, laws were enacted, programmes were formed and agencies were organised to
stimulate the growth of co-operatives and marketing associations,
This movement
started in 1907 when the Philippine Commission tried to attract private capital to
form a bank for agricultural development.
In 1915, Public Act 2508 was passed
with the objective of organisi:'ig co-operatives under the Rural Credit Law.
By 1926, there were about 544 rural credit associations but they became a "flop"
because of unsound loan policies and procedures.
However, in December 1927
Act No. 3425 otherwise known as the "Co-operative Marketing Law" was passed.
Under the law, the Bureau of Commerce and Industry was entrusted with the task of
organising the farmers into co-operatives, primarily to help them in the marketing
of their products.
By 1939 there were 160 co-operative marketing associations
with a total membership of approximately 5,000 farmers.
In 1938, the Consumers' Co-operative League was organised.
It was a
private entity sponsored by the Bureau of Commerce.
Before this prgramme was
launched there were already existing consumers' co-operatives which were
successful.
In 1940, Commonwealth Act No.565, otherwise known as Co-operative Law
was passed.
This Act allowed fifteen or more persons, citizens of the
Philippines or of the United States to form a co-operative which for the first
five years of its operations shall be exempt from all taxes and government fees.
The National Trading Corporation was designated as the entity to carry out the work
- 167 During the later part of
the
National
Co-operative
Administration
was
created
as a distinct entity
1941,
The progress of the work was cut short
to carry out the co-operative projects.
by the outbreak of the Second World War.
0±' supervising, and administering all co-operatives.
15. After the war, the National Co-operative Administration was reThe NCA was responsible
established under Commonwealth Act No. 713 of 1945.
for the promotion and co-ordination of all government activities pertaining to
However, in view of lack of official support and inefficient
co-operatives.
In October 1947 under Executive
organisation, its operations became a failure.
Order No. 93 it was converted into the National Co-operatives and Small Bisiness
64, it became the
Corporation, and in 1950 by virtue of Executive Order No.
Co-operatives Administration Office under the Department of Commerce and Industry.
16. In August 1952, R.A. 821 was passed creating the Agricultural Credit and
The primary aims of ACCPA were:
Co-operative Pinancing Administration (ACCFA).
1t(j)
to promote the effective organisation of small farmers into
co-operatives;
to assist them in obtaining needed credit at reasonable rates;
to place agriculture on the basis of economic equality with other
industries
17. Under the ACCPA, there were 539 registered agricultural co-operatives
of all types with a recorded membership of 310,901 farmers and a total paid-up
On the whole their total business exceeds P$150,000.
capital of P$7.l million.
It provided among
18. In June 1957, Republic Act No 2023 was enacted.
other things for the reorganisation of AOCPA into the Agricultural Credit
Association to fit its role more closely in the massive programme of land reform.
Under the Land Reform Code (R.A. 3844) the functions of ACOFA have been split
The latter is responsible for
between the Agricultural Productivity.
co-operative education, promotion and organisation of agricultural co-operatives
and the ACA retains the functions of supervision and audit together with
financing of organised agricultural co-operatives.
19. These historical accounts of the development of co-operatives reveal the
desire of our people to use co-operatives as an instrument of national policies.
Structure and Recent Development of Co-operatives
in the Philippines
Structure
20.
(a)
Some of the government agencies very much involved in the
organisation and promotion and supervision of co-operatives
both agricultural and non-agricultural are the following:
(1)
ACA - Agricultural Credit Administration;
(2)
APC - Agricultural Productivity Commission;
(3)
SEC - Securities and Exchange Commission;
(4)
NEA - National Electrification Administration;
(5)
CAO - Co-operatives Administration Office;
(6)
ACCI - Agricultural Credit and Co-operatives Institute;
(7)
PACD - Presidential Arm on Community Development.
- 168 -
(b)
On the other hand some of the voluntary agencies are the following:
PREM - Philippine Rural Reconstruction Movement;
ISO - Institute of Social Order;
SPECO - Southern Philippine Educational Center for Co-operatives;
KO - Knights of Columbus;
II1RR - International Institute for Rural Reconstruction.
(c)
Organised federations are the following:
(i)
Philcul - Philippine Credit Union League;
FOWS - Filipino Co-operatives Wholesale Society;
GRMVIACOP - Grains Marketing Co-operatives of the Philippines;
COB - Central Co-operative Exchange;
AOLP - Agricultural Co-operative League of Philippines.
(d)
Financing Institutions:
PNCB - Philippine National Co-operative Bank - this is mainly
for non-agricultural co-operatives;
ACA - Agricultural Credit Administration - this is mainly for
agricultural co-operatives besides being the supervising
agency.
Developments
The creation of the Agricultural Credit and Co-operatives Institute this is the training centre of all types of co-operatives in the
The Institute conducts specialised training ranging from
country.
one week to three months;
the creation of the PNOB - this is the financing institution of
non-agricultural co-operatives;
the declaring of 1969 as an Agricultural Co-operative Development
Year;
the recent enactment of an omnibus bill on co-operatives:
House Bill No. 886 - an Act providing for the system of
developing co-operatives through a unified state policy;
House Bill No.
co-operatives.
881 -
an Act hastening agrarian reform through
The administration of co-operative laws, as an executive function,
devolves upon the Co-operative Administration Office (CÁO) in the case of nonagricultural co-operatives, and upon the Agricultural Credit Administration (ACA)
and. the Agricultural Productivity Commission (APO) in the case of agricultural
The CÁO is one of the bureaux and offices under the Department
co-operatives.
of Commerce and Industry while the AOA and the APC are agencies under the Land
The CÁO has jurisdiction over all non-agricultural co-operatives,
Authority.
such as credit unions, consumers' co-operatives, inddustrial and service cooperatives, and the various federations of non-agricultural co-operatives.
As of 31 December 1966 (latest available), co-operatives have a total
membership of 33,000 and employed 631 persons as managers, book-keepers, salesmen
They had a combined asset of P$5,417,747.65 and a
or sales ladies and helpers.
Their purchases amounted to P$16,337,549.9l
total liability of P3,359,3O5.89.
The net savings realised
and sold P$16,308,223.44 to both members and non-members.
were P$734,7O9.40, P$297,2O7.64 of which was returned to the members in the form of
- 169
patronage refund and P$210,155.84 in the form of interest on capital which under
Republic Act No. 2023 cannot exceed 8 per cent per annum.
The wholesale society is known as the Filipino Co-operative Wholesale
To it are affiliated 156 consumers' co-operatives, 3 industrial
Society, Inc.
co-operatives and. 5 service co-operatives or a total of 194 primary co-operatives.
This is indeed very small for
The total paid-up capital amounts to P$lll,455.28.
a wholesale society as some of the affiliated co-operatives are even bigger than
But FOWS has been in
FOWS in terms of capital and volume of business handled.
On
existence for only seven years, having been registered on 29 March 1963.
31 December 1969 its direct sales amounted to P$614,131.33 and the indent sales
amounted to P$736,225.
Direct sales represent commodities bought by the Wholesale Society on its own
account for distribution to its affiliates and include such items as milk, sardines,
corned beef, butter, canned fruit and the like, while indent or agency sales
represent machines, spare parts and raw materials bought by the society for and on
For the latter sales, POWS
behalf of industrial and service co-operatives.
collects service feesfromits members.
One unique feature of FCWS is the fact that it is a purely voluntary
organisation or primary co-operative wherein the Government has no particapatoi
either in financing or management, unlike our Philippine National Co-operative
Bank wherein the Government contributed P$l,000,000 towards its capitalisation and
accordingly participates in the management thereof.
In addition to the procurement and distribution of commodities, FOWS
collaborates with the CAO, Central Co-operative Educational Board (CCEB) and the
Agricultural Credit and Co-operatives Institute (ACCI) in co-operative promotion
and education, assists industrial and service co-operatives market their products,
Through the seminars sponsored
recruit and train their personnel and employees.
by the CCEB, CÁO and ACCI, the Filipino Co-operative Wholesale Society has
The
maintained a constant and continuing dialogue with primary societies.
president or the general manager is invariably involved in these seminars as a
Seminar participants have been introduced to the FCWS
resource person.
operations through their visits to the office of the society as part of the
In addition to these seminars, the society has always
seminar field trips.
involved itself in conferences, workshops and meetings among co-operators and
prospective organiëers of co-opeatives to appraise them of the objectives and
programme of the society.
The consumers' co-operative movement in our country is relatively young.
Our societies are relatively small and are mostly of the institutional type.
As such,
There are very few open-area or community consumers' co-operatives.
they have not played a significant role in the distribution of consumer goods.
In many cases they find it difficult to compete with private retailers due to
various reasons, one of which is that the operation of private retailers is more
econdmical than a consumers' co-operative because the former re usually faniil
aff airs where the members of a family alternate in handling or managing the store.
Consumers' co-operatives, on the other hand, are required to have their full-time
managers, book-keepers and perhaps one or more helpers.
Trade Unions
During the Spanish colonial administration in the Philippines, there
were organisations of workers in the form of religious guilds, mutual assistance
societies, and secret masonic and revolutionary societies of the nineteenth
century, but these organisations were not trade unions as we know them today.
The beginnings of the Filipino labour movement in the modern sense occurred only
with the return of peace in the country following the revolution against the
Filipino wage earners
Spaniards and later the resistance against the Americans.
in Manila began to organise in 1899 and in a short time had formed autonomous
unions among barbers, woodworkers, carpenters, clerks and workers in the tobacco
The movement began to take definite shape two years later
and printing trades.
with the organisation in 9O2 of the UniOn Obrera Democratioa Filipina
The labour
(Philippine Democratic Labour Union) by Don Isabelo delos Reyes.
union activity of delos Reyes was said to be nationalist and political in
Together with other
orientation and this was the root of his later difficulties.
labour leaders of his time, delos Reyes incurred the displeasure of American
- 170 -
administrators due to their activities for which they were tried and found guilty
under the old Spanish Penal Code which penalied the "organisation of workmen for
the purpose ol' raising wages".
In spite of this old law, however, many more leaders came up in defence
of workers' rights and varied organisations were formed, either linked with
But in 1906, the American authorities
political groups or subversive movements.
allowed the establishment of a number of parties, including labour unions, which
were committed to early independence.
A bureau of labour was created in 1908 in
order to further legalise the labour movement, although it was not protected nor
encouraged.
This was the situation of labour in the Philippines up to 1936
when the then President Manuel 1. Quezon included in this programme of
administration the policy of social justice which brought about the enactment of
Commonwealth Act 444, which limited working hours to eight hours a day,
Commonwealth Act 210, which extended compensation to sick or injured workers,
and othe legislation favourable to workers.
With the outbreak of the Second World War, labour union activity was
supplanted by resistance activity.
A great number of guerilla bands fought the
enemy on all fronts.
At the end of the war, the communists took part in the
political activities, as well as in the labour movement, of the country.
They
organised the Congress of Labour Organisations, which was dissolved in 1951 after
it was found to be linked with the activities of the Cmmunist Party of the
Philippines.
Paced by a workers' revolt, initiated by banned communist leaders who
went underground, the Philippine Government enacted the Industrial Peace Act
(Republic Act No, 875 - patterned after the Taft-Hartley Act of the United States)
which gave impetus to the growth of trade unionism in the country.
The workers'
right to bargain collectively with employers was enhanced, substituting the old
practice of compulsory arbitration.
This the workers were encouraged to organise
and the next months saw the growing number of labour unions seeking registration
with the Department of Labout'.
Trade unions in the Philippines are mainly organised on the company
level, i.e. all workers in one company, whatever their functions or trades may be,
formed on single union.
Supervisors are, however, forbidden by law to join
unions of workers under them so that they organise themselves as a separate unit
within the company.
Each union bargained individually with each employer.
In the oil and transport industries, however, the existence of industrial unions
is evident.
The Philippine labour movement is fragmented.
Instead of working
together, the existing labour unions, which cover only about 10 per cent of the
total labour force of the country, work only for their individual interests.
However, when their common welfare is involved, like the enactment of legislation inimical to labour as a whole, they find themselves united in an
organisation called the National Labor Unity Committee, fighting hand-in-hand
for the repeal of' such legislation.
Inter-Relations between Trade Unions
and Co-operatives
There are some trade unions in the Philippthes that are able to
organise various types of co-operatives in the respective business establishments.
However, the majority of these organisations have not found time to do so, maybe because they have been focusing their attention mainly on trying to get better
benefits for their members through collective bargaining.
There is an inter-relation to a small extent on financing and collective
membership, but not in common bodies since this system is not allowed by
Philippine law.
Relations between trade unions and co-operatives are still in
the initial stage in the country.
Credit unions, consumers' and housing
co-operatives are being considered for joint sponsorship, but there is still a
great need for establishing co-operatives and trade unions on the plantations,
as well as in the factories, business offices, etc.
Collaboration between the
two movements is very negligible, but there are moves now towards this direction.
- 171 -
Prospect for Future Co-operatives and
Trade Unions in the Country
4
Prospects are very good since some trade unions have started working
towards co-operative education and the same is true in some co-operatives where
they inject trade unionism into their education programmes.
The difficulties encountered in this respect are mainly the lack of
There is also
financial and material resources as well as of trained personnel.
the sense of individualism and apathy on the part of workers to work together.
However, tlis is being overcome bi good leadership which comes from the ranks and
from technica-L peronne.i. wxio come and. heip in te organisation and management
aspects of trade unions and co-operatives.
- 172 -
APPENDIX VII
Final Recommendations by the Plenary
Session
The plenary session recognises the need for collaboration between the
trade unions and co-operatives in certain areas and recommends the adoption of
the following for their effective collaboration.
1.
I.
Joint Council
The establisi-iment of a joint council for both movements with equitable
Such a council
representation at national and local levels is desirable.
The objects of this joint council are:
should be a voluntary affiliation.
to formulate the policy on matters where collaboration is deemed
desirable;
to act as a consultative body in respect of joint programmes;
(C)
to conduct feasibility studies in fields where collaboration has been
agreed upon;
to represent the movements jointly where such action is desirable in the
mutual interest of both;
to consider promoting further educational and training programmes;
to determine priorities of programmes.
II.
Central Fund
But where a co-operative
a legally constituted central fund be established.
bank is already in existence another central institution should not be
created.
However, the scope of such a bank should be widened so that
trade unions could be shareholders;
the fund be utilised for projects mutually beneficial to both movements
as may be recommended by the joint council from time to time;
institutional borrowing by member institutions be a feature of the fund
and that adequate securities be given by the borrowing member.
Sources of finance for the fund are suggested as follows:
-
shares;
-
reserves of co-operatives and trade unions;
-
deposits from member institutions;
-
loans from government, employers and banks.
III.
Legislation
The plenary session recognises the need for legislative changes to allow
effective collaboration and recommends that where necessary joint action be
taken with an aim to ensure that existing and future legislation is not in
conflict with the common interest of both movements.
IV.
(a)
Priorities
the highest priority be placed on savings and credit societies as a sound
basis for further co-operative development;
4
- 173 -
in general, single purpose co-operatives should precede the formation of
multi-purpose co-operatives which should be introduced in relation to the
need and capaciby of the movements
where necessary and desirable, pre-co-operative activities should be
encouraged.
V.
Oonflicts of Interest
The plenary session, after having considered the reports of the trade unions
and co-operatives with regard to collaboration of the two, appreciates that
conflicts of interest could arise in the foLlowing:
Membership
The form of membership the trade unions should have in joint co-operal4ve
ventures at the primary level - however., the plenary session does agre4
that at the secondary level the membership should be institutional.
Relationship Between the Movements
and the State
The degree of influence exercised by the State on the co-operative
movement in developing countries presently, raises an inherent fear in
the trade union movement of the possibility of government control being
exercised on the trade unions as well i± collaboration materialises.
This control may be detrimental to the trade unions as free institutions.
Therefore, the plenary session emphasises the importance of the two motements being free and autonomous.