Workers co-operatives in a glimpse

(Part I)

As the University Professor that occupies the research chair on Social Entrepreneurship at the University of Asia and the Pacific, I have been at the forefront of identifying alternative forms or structures of business organizations that can combine generating profit for sustainability in a business venture with the equally important mission of a growing number of businesses to directly contribute to the common good. I have been gratified to observe that an increasing number of Filipino entrepreneurs are founding social enterprises which combine in their mission the objective to make a profit with contributing to the solution of a social problem, over and above providing useful goods or services and generating employment. There is nothing wrong with the business model that exclusively focuses on the providing goods or services to the general public and generating employment. It is good, however, that some businesses are being established with the primary mission of solving other problems of society, such as protecting the physical environment, addressing dehumanizing poverty, fostering the right values and virtues among the citizens, providing housing for the informal sectors, and helping small and medium-scale entrepreneurs. I am sure there will be other forms of social enterprises in the future that will address some of the many emerging social problems of an agro-industrial society in the twenty first century.

One of the alternative forms I have studied with a team of academics, business people and NGO officials is that of the worker co-operatives. I would like to share with the readers some of the findings of our more than five-year effort to introduce the form of the worker cooperatives into the mainstream of Philippine business. This is especially relevant to the efforts of the Philippine society to address the so-called “endo” or contractualization problem. How do we make security of tenure and social protection of workers compatible with the harsh reality that there are numerous jobs, such as those in the construction industry, retailing, agribusiness and manufacturing that are by nature seasonal and are not amenable to full-time employment twelve months a year. For example, how do you mobilize farm hands who are required only for a short period of time by big plantations to plant or harvest agricultural products like bananas, palm oil or pineapples. Will you require a retail store to hire a full contingent of workers for twelve months a year when there is a peak demand for these workers only from September to December to coincide with, say the so-called Christmas period?

First, let us have a clear meaning of a co-operative under Philippine laws which have been inspired by a definition given by the International Labor Office (ILO). According to ILO, “a co-operative is an autonomous association of people united voluntarily to meet their common economic, social and cultural needs and aspirations through jointly and democratically-controlled enterprises.” Adopting the same idea, the Cooperative Development Authority (CDA) created by legislation defines a co-operative as “an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve their social, economic and cultural needs and aspirations by making equitable contributions to the capital required, patronizing their products and services and accepting a fair share of risks and benefits of the undertaking in accordance with the universally accepted cooperative principles.” The common types of co-operatives in the Philippines are credit, consumer, producer, service, multipurpose, advocacy, agrarian reform, banking and dairy co-operatives.

In an address to the Workers CoOp Federation of Italy, Pope Francis expressed his support for co-operatives as a means to achieve an “economy of honesty.” He encouraged Workers CoOp to prioritize the following: 1) Create jobs especially for the youth; 2) identify social welfare solutions, especially to address the health requirements of senior citizens; 3) find solutions to address the needs of those who live in existential peripheries or those who are marginalized; 4) help mothers to live a work-family balance in their desire to augment the incomes of their families; 5) work with other co-operatives in promoting an honest and healing economy. All of these tasks can be harmonized with the blueprint 2020 of the International Co-Op Alliance (ICA) which includes elements of participation, sustainability, identify, capital mobilization and legal framework. These fundamental principles can be used by co-operative all over the world to craft and promote appropriate policies, programs and projects.

As a help to our legislators and executive departments who are concerned with the welfare of workers, let me lay out the basic characteristics of a worker co-operative as espoused by the International Labor Office (ILO). Worker co-operatives have the following features:

• Worker co-operatives have the objective of creating and maintaining sustainable jobs and generating wealth, in order to improve the quality of life of the worker-members, dignity of human work, allow workers democratic selfmanagement, and promote community and local development.

• Free and voluntary membership in the co-operative is conditioned by the existence of workplaces.

• As a general rule, work shall be carried out by the members themselves. This means that the majority of the workers in a given worker co-operatives are members although there can be a minority of non-member workers.

• The worker-members’ relation to their co-operative differs from that of conventional wage-based labor and from self-employed workers.

• The internal regulation of the cooperative is formally defined by regimes that are democratically agreed upon and accepted by the worker-members.

• Worker co-operatives shall be autonomous and independent, before the State and third parties, in their labor relations and management, and in the usage of the means of production.

It is important to distinguish between a producer co-operative and a worker cooperative. According to ILO, a producer co-operative is one where “members are both co-owners and employees of the cooperative whose aim to produce goods and/or services.” In contrast, a worker or labor co-operative is one “whose members sell their labor and skills to other enterprises.” For example, there are dairy co-operatives whose members are both co-owners and employees of the enterprise producing milk from cows or goats. These are producer co-operatives. While one of the foremost worker cooperatives in the Philippines, AsiaPro established in 1998, sells the services of its members in harvesting bananas or pineapples in Mindanao to the large plantations or in servicing retail outlets or fast food restaurants who need temporary workers during peak periods of their business cycles. (To be continued)

For comments, my email address is bernardo.villegas@uap.asia.