No 599 Posted by fw October 24, 2012
Quebec co-op summit marquee event in this the UN-declared International Year of Co-operatives
Last week’s International Summit of Co-operatives (subtitled “The Amazing Power of Co-operatives”) was clearly designed to put the co-operative model front and centre on the world’s economic policy agenda. The Summit, held in Quebec City, did just that.
2012 is the UN-declared International Year of Co-operatives, and this conference was in many ways the Year’s marquee event — for the world.
For me, active for many years in Ontario co-ops, it was an opportunity to rub shoulders with an amazing and diverse group of committed co-operators. And to deeply savour the scope and potential the co-op model has. As the catch-phrase for the Year says: “Co-operative Enterprises Build a Better World.” We heard many examples of just that.
With 2800 delegates, and 91 countries represented, the conference reflected the impact that co-operatives have worldwide: some one billion members, 3 -5 per cent of the world’s GDP (according to McKinsey, which produced a study on co-operatives for the conference).
The Conference was sponsored primarily by the remarkably successful and sophisticated Quebec-based Desjardins Movement, a decentralized financial co-operative with 8 million member customers, assets of $190 billion, net income last year of $1.5 billion.
Co-op movement origins traced to Rochdale, England, 1844
Desjardins is but one of many hugely successful co-operatives worldwide — all, more or less, are structured on the original principles a group of weavers adopted to set up a store in Rochdale, England in 1844. The one member, one vote principle, regardless of the amount of investment, is the coop movement’s defining characteristic. That, and a priority business focus on meeting the economic needs of their members.
Quebec summit explored ways to exploit failures of prevailing global economic system
This conference was particularly timely, as the prevailing economic system is daily demonstrating its failure to meet those needs; the conference explicitly explored ways that the co-operative movement can seize the opportunity presented by the world financial crisis to vastly expand its impact.
Liberal MP Mauril Belanger and Helene Leblanc, NDP MP and Industry critic, attended the entire five-day conference. Both Belanger and Leblanc are strong advocates for co-ops at the federal level.
Nepal’s constitution enshrines co-op model for its economic development
And there was the Nepalese Minister for Co-operatives and Poverty Reduction telling us of his government’s constitution that enshrines the co-operative model for the country’s economic development. Nepal, he said, has 3.6 million co-op members — 47 per cent are women, with coops seen as a main way in which women are empowered.
Success stories galore
Some of the co-op success stories we heard:
UK’s Cooperative Group — (with roots all the way back to the 1844 Rochdale store) has business in groceries, funeral services, pharmacy, travel, banking and insurance, Peter Marks, its CEO, described a co-op with a significant decline in market share (from 25 per cent 45 years ago to 4 per cent). By rejuvenating its leadership, and rejigging its businesses, it has boosted its membership from 800,000 in 2005 to 7,000,000 in 2011. It is now UK’s fourth largest supermarket and sixth largest bank — and about to acquire another. According to Marks, “Our competitors can compete with us on products, price, and service — all else being equal, the co-op difference is the tiebreaker.”
Vancouver’s Vancity — Paula Martin, of Vancouver’s Vancity, always a leading light among financial co-operatives (or credit unions), told us how they recently revisited Vancity’s member relations and business model, redefining wealth, not as an individual goal, but one connected to a thriving sustainable community. That was nicely captured in their tagline: “We make you good money by putting money to good.”
U.S. National Rural Electric Cooperative Association — Martin Lowery, is an executive from the U.S. National Rural Electric Cooperative Association, with membership of approximately 900 New Deal-era rural electricity distribution co-ops in the US — owning 42 per cent of U.S. distribution lines.
“We power our communities,” he said. “We empower our communities for a better life.”
He told us, when faced with deregulation, they were advised to forget about participating in the market, and deal with Enron(!). To their credit, they chose not to take that advice and today their trading entity is the largest trader of electricity in the United States. He proudly described the cooperative advantage in that business: “If you want to have price discovery, trade with co-ops — you know the real price of power.”
Equidad Securos — Clemente Jaimes of Equidad Securos, a “100 per cent co-operative” insurance company owned by 1400 cooperatives in Colombia, faced with declining sales, purchased a local soccer team, which fortunately was hugely successful, giving its brand huge visibility, and, with other initiatives, rebuilt the co-operative to the third largest in Columbia.
Alliance of Italian Cooperatives — Enzo Pezzini, of the Alliance of Italian Cooperatives, told us of the amazing growth of social cooperatives in Italy. With roots in the 1970s, their impetus came from both dissatisfied recipients of social services and their families, and the caregivers. A new model was borne — a social coop, whose members were both caregivers and families. The coop contracts with government to provide services previously provided by it, and assumed the government employees. The result — far better quality services, and job satisfaction, at a lower cost than the government’s. By 2011, there were 11,808 social cooperatives and consortiums in Italy. In six years’ time, they have grown by 57.7 percent and have a work force of over 350,000 people, including more than 30,000 “disadvantaged” persons. Approximately 4.5 million people benefit from their services. Given this remarkable growth, it’s not surprising that Pezzini says: “The cooperative model has so much more to contribute to our globalized societies.”
There were a number of themes that the conference touched on:
Benefits of co-op model over private corporate model — How the co-op model’s primary focus on member benefit can give a significant advantage over private sector firmed focused on short-term profit maximization.
Focus on people’s real needs — The growth imperative, so fundamental to capitalist economic health, isn’t a necessary feature of co-operatives, positioning them for a much stronger role in a sustainable economy that focuses on people’s real needs. And speaker after speaker warned of need for a far more sustainable approach to the economy, citing the likely cessation of economic growth — whether from the debt crisis, resource scarcity, or ecological limits.
Co-op funding strategies — How to get co-operatives the capital they need. A Deloitte study commissioned for the conference researched strategies — primarily for the larger co-operatives — some of which, to the chagrin of some attendees, have resorted to issuing a minority of their shares in the private markets.
Grounded in three fundamentals — And for progressives — how to ensure that, as it goes from success to success, the co-op movement remains well-rooted in its fundamentals — democratic control, focus on meeting members’ needs, and community well-being.
Recognition of need to raise public awareness about the co-op model
Co-operators are often perplexed by the fact that, despite its significant worldwide success, public awareness of the co-op model is often low to non-existent.
With that in mind, as the conference drew to a close, Roberto Rodriguez, former minister of agriculture in Brazil under President Lula, and now Special Ambassador for Co-operatives to the United Nation’s Food and Agricultural Organization, provocatively proposed that the co-operative movement be nominated for the Nobel Peace Prize. He put it succinctly: “The enemies of peace are social exclusion and concentration of wealth. If so, co-ops are the defenders of peace. You can say I’m a dreamer but I’m not the only one.”
Delegates laughed – and cheered.
Brian Iler is a Toronto lawyer. His firm, Iler Campbell LLP represents many cooperative clients.