UĦM Voice of the Workers eMagazine issue 05

VOICE OF THE

WORKERS ISSUE 05 FEBRUARY 2014

EDITOR’S NOTE

Cooperatives

Contents 1+1 = 5

02

The power of Democratic, Co-operative Business

03

Cooperatives and Social Cooperatives

05

A new way of doing business 06 Cooperatives’ contribution to the labour market 07 Initiatives in Europe 08

Welcome to a brand new edition of the Voice of the Workers eMagazine.

huge opportunities co-operatives can present to workers as well as activity in the social sphere.

This issue deals how we can make persons the center of business activity: Co-operatives. All around the world, co-operatives form a very important part of the economic and social fibre. There are a democratic way of doing business, and are regarded as one of the most sociallyfriendly models of business.

Unfortunately, many people in Malta know very little about the

Co-operatives have a local emphasis, do ethical business, and put self-help at the center of their operations. In this issue you can know more about the cooperative model of business, and how co-operatives can present precious opportunities to workers and their families to participate directly in the organizations they work in.

Enjoy!

VOICE OF THE

WORKERS

Cooperatives form an essential part of the social economy, precisely because they give power to the people

READ MORE ON PAGE 3 1

1+1 = 5 The power of synergy. Rowing together, having the same vision, in the same direction. Success often depends on how well we can work together. Cooperatives are member managed, democratic businesses that have a human and social heart. One in six persons in the world cannot be wrong.

VOICE OF THE

WORKERS

2

The power of Democratic, Co-operative Business

WORKING TOGETHER HAS ALWAYS BEEN VITAL FOR OUR SURVIVAL. THIS WAS THE INSPIRATION BEHIND A GROUP OF 28 TRADESMEN IN ROCHDALE, ENGLAND, IN 1844. DURING THE HARSH DAYS OF THE INDUSTRIAL REVOLUTION, THEY DECIDED TO COOPERATE TOGETHER TO OPEN THEIR OWN OUTLET SELLING FOOD ITEMS THEY COULD BUY IN BULK AND THAT WOULD OTHERWISE BE UNAFFORDABLE. THESE ‘ROCHDALE PIONEERS’, LISTED A DECLARATION OF PRINCIPLES THAT WERE TO FORM PART OF THE MODERN-DAY CO-OPERATIVE PRINCIPLES But what is a cooperative? It is essentially a business run democratically by its members.

The basic difference between a cooperative and a limited liability company is that the emphasis is not on the financial aspect but on the human one. In a company, a person’s voting power depends on the financial input into the company. In the case of a cooperative, the principle of one VOICE OF THE

WORKERS

person, one vote ensures that it is the people who decide, not the money.

Cooperatives throughout the world are a huge business force.

Around one billion people are members of a cooperative around the world, sharing the same business principles of open, honest and ethical business.

Worker cooperatives around

the world employ 20% more workers than their multinational counterparts combined. In Malta there are currently over sixty co-operatives with around 5,200 members. These cooperatives have an average annual turnover of €76 million.

The beauty of the cooperative business model is that it enables people to become owners of their 3

enterprises. Be it a consumer, financial, services, worker, or social cooperative, the model is not just socially beneficial, but also flexible for almost any sector of the economy. And because these business organisations are directly owned and managed by the members, cooperatives have strong local roots, and are therefore essential in local well-being and employment.

Moreover, during the current world economic crisis, it has been proven that whilst traditional business models were very vulnerable to environmental changes, cooperatives proved to be resilient in times of crisis, and a good portion of them went even better.

What about Malta? The cooperative movement started in 1947, together with Cyprus.

In Cyprus, over half of the population is member of a cooperative. There are various factors that may have played a part in this, including our cultural lack of cooperation for our own good. However, now is the right time to make this happen.

Cooperatives form an essential part of the social economy, precisely because they give power to the people. It is high time that people and workers become direct players in the decisions that affect them, and derive benefit of directly cooperating together.

Even in the social sphere, cooperatives that are active in the advancement of people who need the extra push, are a very good way of creating a fairer and more prosperous society.

How can we achieve this? The solutions are various. Firstly, we need to make cooperation an essential part of our educational system, from early years to post graduate levels. Also, we need to make sure that the current legislation is brought up to date, enabling more people to be able to form cooperative businesses, and that all cooperatives and their representatives are treated fairly.

In the social sector, cooperatives need to be promoted and pushed higher up on the agenda, as they offer a vital road to long-term and sustainable development of the sector and the people that can develop within it.

The year 2012 was declared by the United Nations as the International Year of Cooperatives, with the motto “Cooperatives build a better world�.

They can build a better Malta too.

Cooperatives form an essential part of the social economy, precisely because they give power to the people

VOICE OF THE

WORKERS

4

Cooperatives and Social Cooperatives THE EUROPEAN COMMISSION (EC) DEFINES COOPERATIVES AS “AUTONOMOUS ASSOCIATIONS OF PERSONS UNITED VOLUNTARILY TO MEET THEIR COMMON ECONOMIC, SOCIAL, AND CULTURAL NEEDS AND ASPIRATIONS THROUGH A JOINTLY OWNED AND DEMOCRATICALLY CONTROLLED ENTERPRISE.”

Cooperatives represent an important sector of the European economy. In fact, the EC estimates that there are 250,000 cooperative enterprises in the European Union (EU). Together, these organisations employ 5.4 million workers. Information technology, banking, transport, agriculture and retailing are among the main market sectors where cooperatives have been successful in the EU. The EU recognised the importance of cooperatives through the Statute for a European Cooperative Society (Council Regulation No 1435/2003). The Statute protects cooperatives in the EU by giving them the relevant legal instruments for better

market accessibility and survival in the market through economies of scale. Moreover it also supports cooperatives in undertaking research and development initiatives.

Further importance to this particular business-model was given by the EC’s adoption of the Communication on the promotion of co-operative societies – COM (2004) 18. The objective of the Communication is to fully exploit the potential of cooperatives at EU level. It focuses on the visibility of cooperatives and their important contribution to the community.

The Communication concludes that Member States must assume a significant role in the development of domestic cooperatives.

One popular form of cooperatives are social cooperatives. These not-forprofit cooperatives are set up to supply community services, generally in the care sector. Their main objective is that of helping the most vulnerable individuals in society.

A social cooperative can also be recognised as a European Cooperative Society if it respects the conditions listed in the Regulation on the Statute for a European Co-operative Society.

One of these requirements is that a European cooperative must be formed by a minimum of five or more people resident in at least two Member States.

MEUSAC 280 Republic Street, Valletta VLT 1112 Tel: +356 2200 3315 • Fax: +356 2200 3329 • Email: info.meusac@gov.mt www.meusac.gov.mt VOICE OF THE

WORKERS

5

A new way of doing business Cooperatives are a relatively new way of doing business. They are increasing in popularity and their development and effect on entrepreneurship are being considered as highly positive to global economies. This business model gives economic power directly to those who are contributing to the success of the undertaking since profits and earnings are shared amongst members. Cooperatives are a global tool and through intercooperative collaboration, their values and beliefs are becoming more widespread. Some also say that cooperatives have assisted in creating better employment conditions in certain sectors and in facilitating SME growth.

Cooperatives focus on the individual rather than on his/her financial standing. One notices

that in Malta the number of registered cooperatives in recent years has been on the increase.

They operate in various sectors ranging from the services industry to agriculture and fisheries.

Furthermore, there are also cooperatives for employees and for consumers.

It is interesting to note that cooperatives have taken a step further and welcomed in the notion of Social Cooperatives.

The latter invest their work in the disadvantaged population.

Social cooperatives can be considered as a socially beneficial business option geared at satisfying peoples’ needs and goals. Their inception is due to an entrepreneurial spirit amongst the members which is directed to achieve social aims. Profits that are made are redirected towards this aim.

There are various positive implications of social cooperatives on societies. Individuals, who would normally be unemployed or inactive in the labour market can become members of social cooperatives and help their own cause. Moreover, employees are given a sense of belonging and ownership something which might be lacking in other business models.

Social cooperatives can also be an option for NGOs and Local Government to achieve their aims and objectives. It can also help to increase female participation in the labour market if used well and if marketed appropriately.

Initiatives, such as cooperatives, wherein sustainable economic growth goes hand in hand with social responsibilities are very welcome in the global economic and social spheres. Initiatives which centre around value added contributors need to be further encouraged.

MCESD 280/3, Republic Street, Valletta, VLT1112 Tel: (+356) 2200 3300 www.mcesd.org.mt

VOICE OF THE

WORKERS

6

Cooperatives’ contribution to the labour market

Notwithstanding the global financial and economic crisis the number of social cooperative enterprises within the European Union has increased, meaning that in times of trouble the need for people to get together and work together through social cooperatives is paramount in exploring avenues that create jobs, economic growth and innovation.

Democratically owned by their members, social co-operative enterprises promote social justice and solidarity. These businesses play a significant socio-

economic role, bringing an innovative vision to the current mainstream economy.

Social co-operative enterprises contribute to the development of new markets creating job opportunities that last in a variety of areas, such as; health care, work integration, education, life-long learning, environment, culture, digital society, fair trade, transport, community development and much more. These organisations also play a key role in the labour market integration of disadvantaged

persons and of those who are in precarious work situations.

Their specific governance features, business mission and capital accumulation policy ensures financial stability, a continuous socio-economic development contribution, employment and a balanced distribution of wealth.

Social co-operative enterprises unlock the ability for people to actively participate in the labour market especially when these are backed by a serious, holistic and permanent Active Labour Market Policy.

87, St. Ursola Street, Valletta VLT 1234 Malta Tel: (+356) 21 233 078 Email: info@maltacooperativefederation.coop www.maltacooperativefederation.coop VOICE OF THE

WORKERS

7

Initiatives in Europe

The European Confederation of Cooperatives and worker-owned enterprises active in industries and services (CECOP-CICOPA Europe) presented a document containing opportunities and challenges for successful business transfers in Europe under the cooperative form. Several good examples are presented from Spain, Italy, France and the UK together with the cooperative characteristics and the legal environment facilitating business transfer to employees. The document also offers an overview of the financial and support services for business transfers to employees and policy recommendations addressed to the European Commission and the member states. The document “Business Transfers to Employees under the Form of a Cooperative in Europe”, is available here: http://www.cecop.coop/IMG/pdf/

EVENTS

bussiness_transfers_to_employees_under_the_ form_of_a_cooperative_in_europe_cecop-4.pdf

The General Assembly of Cooperatives Europe (http://coopseurope.coop/) will be held on the 3rd of April 2014 in Warsaw. It consists of a governance meeting in which Cooperatives Europe member organisations will meet to discuss on future challenges. The event will be organised by the National Cooperative Council of Poland. For more information on the event click here: http:// coopseurope.coop/node/435

Cooperatives strongly welcome the new EU programme for CSOs: On 27th December 2013, the first comments and observations made by the cooperative movement concerning the new EU programme 2014-2020 for Civil Society Organisations (CSOs) were introduced to the EU Commission, DG Development & Cooperation.

This EU support programme known as “Priority 2” aims to reinforcing the CSO networks active in development cooperation. The programme was presented at the last Policy Forum on Development held in Brussels on 28th and 29th of November 2013.

Cooperatives Europe welcomes this programme since we have been strongly advocating for this type of EU strategy. Further, this EU initiative translates into an action programme the discussions of the Policy Forum during the last years. Please find the brochure containing all the information here: http://coopseurope.coop/sites/ default/files/CoopsEurope_Brochure_HiResApril. pdf REScoop 20-20-20 is an initiative launched by the Federation of groups and cooperatives of citizens for renewable energy in Europe with the support of the Intelligent Energy Europe Program (European Commission). Twelve organisations in seven countries have joined forces to increase the number of successful citizen-led renewable energy projects across Europe. See: http://www.rescoop.eu

UNION ÓADDIEMA MAGÓQUDIN (Malta Workers’ Union) Dar Reggie Miller, St Thomas Street, Floriana, FRN 1123 - Malta Tel +356 21220847 - +356 21234801 - +356 21236484 • Email info@uhm.org.mt www.uhm.org.mt Operational Programme II - Cohesion Policy 2007-2013 Empowering People for More Jobs and a Better Quality of Life Project part-financed by the European Union European Social Fund (ESF) Co-financing rate: 72.25% EU, 12.75 MT, 15% Private Funds Investing in your future

TOOLS

DOCUMENTS

The EU and its institutions, as well as the co-operative movement itself, engage in numerous initiatives that promote the co-operative model, and discuss issues that are relevant to co-operatives and their development on a European level. The Brussels desk of the CIA provides this eMagazine with information and resources relating to the co-operative sector.