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No. 1

Published August 6 2018

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Articles

  1. Deolinda Aparício Meira (Author)

    THE MOST RELEVANT TREND LINES OF COOPERATIVE SHARE CAPITAL REGIME IN THE NEW PORTUGUESE COOPERATIVE CODE

    This study analyses the most relevant trend lines of the cooperative share capital regime in the new Portuguese Cooperative Code. In order to ensure the sustainability of thecooperative, providing it with appropriate mechanisms to be efficient on the market, the new code introduced investor members, reduced the amount of the minimum share capital, clarified the legal regime of cooperators‘ contributions to share capital and extended the list of statutory limits as to the exercise of the right to reimbursement. In the modernization of the cooperative share capital regime the legislator did not abdicate from the preservation of the cooperative identity, continuing to recognize the variability of the share capital.

  2. Sergio Reyes Lavega (Author)

    SPECIAL CAPITALIZATION INSTRUMENTSIN THE URUGUAYAN COOPERATIVE LAW

    This article refers to the capitalization instruments (of financing in a broad sense) provided in the General Cooperatives Law of Uruguay of 2008: the so-called Subordinated Participations and Interested Participations. We introduce the capitalization theory of cooperatives in general, and then describe and analyze some points of said Act: (i) emission requirements, (ii) legislation application on the stock market; (iii)possible categorization as securities; (iv) impact that the Income Tax may have on its viability; and(v) legal nature of theassets.

  3. Lotes Lab-oyan (Author)

    DOCUMENTARY ANALYSIS ON THE STATUTORY FUNDS OF COOPERATIVES IN THECORDILLERA ADMINISTRATIVE REGION, PHILIPPINES

    The study evaluated cooperatives‘ compliance based onthe provisions of the Philippine Cooperative Code and cooperative by-laws on order of distribution, allocation and utilization of their statutory funds [general reserve fund {GRF}, cooperative education and training fund {CETF}, optional fund {OF}, and community development fund {CDF}]. Fifty (50) cooperatives in Baguio and Benguet served as participants. Ninety-eight percent (98%) up to 100% percent complied with the order on distribution of statutory funds in their respective by-laws consistent with the Philippine Cooperative Code. Based on records and interviews, one cooperative sourced the GRF from credit and consumer operations and not from the consolidated financial operations, thus the rate used was lower. From the Audited Financial Statement and other reports submitted to CDA, compliance with funding statutory funds is about 78%-98% with GRF (98%) as the most funded followed by CDF (92%); OF (84%) and CETF (78%) respectively. From interviews, key informants reveal that they directly charge training fees to operational expenses, hence reducing the allocation in the by-laws as observed in the data with only 26 participants that used the 10% maximum provision in their by-laws. Utilization of statutory funds was between fourteen and eighty-two percent (14%-82%) with CETF (82%) as the most utilized and GRF (14%) as the least utilized. The low utilization of the GRF shows compliance with legal provisions of law making it a restricted fund to cover operational losses. There was significant difference on the utilization of statutory funds but not on the order of distribution and funding. Based on interviews, medium and large cooperatives allocate lower rates in their CETF; cooperatives use their OF to acquire real estate properties; other cooperatives deposit their statutory funds in banks and other high yielding investments; for others, they do not know how to treat their optional fund. For the community development fund of three percent, 92 percent of participants complied with the provision of their by-laws and only about 72 percent utilized their community development fund. As explained by key informants, changes in the composition of officers along with background and work experiences affected the full utilization of the community development fund.

  4. Ronaldo Gaudio (Author)

    APPLYING PECOL IN THE CURRENT BRAZILIAN REGULATION OF FINANCIAL COOPERATIVES -CHALLENGES OF THE EQUALIZATION BETWEEN EFFICIENCY AND IDENTITY

    With the objective of investigating the risks of possible imbalances between the requirements of economic efficiency and preservation of identity, the article analyzes aspects of the normative regulation of financial cooperatives specifically from the perspective of the ―Principles of European Cooperative Law (PECOL)‖as a strategy against the phenomenon of the "companisation" of financial cooperatives.

  5. Marianna Ferraz Teixeira (Author)

    THE NEW HYPO-SUFFICIENCY AND THE RELATIONS BETWEEN COOPERATIVES AND THEIR MEMBERS

    Thisstudy aims to analyze the characteristics of the relationship between cooperatives and their associates. Cooperatives are societies that exist for solidarity and equality among their members. For that reason, ―cooperative action‖ demands those characteristics and excludes any lucrative purpose, in addition to preventing decisions that are not made through deliberation and permitting the use of the services in conformity with the general decisions. Thus, associates enjoy a dual quality, which is acting as users and managers of the business. Also, in light of the autonomy of the members and the non-existence of inequality, the principles of vulnerability and hypo-sufficiency should not be applied. Therefore, it is necessary that the analysis of the new concept of hypo sufficiency,values the will according to the dignity of the human person, allows an individualized treatment and also guarantees the continuity of the society and the income of the members. Otherwise, there will be an excess of protection without observing the particular characteristics of cooperativism.

  6. David Hiez (Author)

    THE GENERAL INTEREST COOPERATIVES: A CHALLENGE FOR COOPERATIVE LAW

    The legal recognition of cooperatives beganing of the 19 th century and developed in the beginning of the 20th century. Cooperators in most countries struggled to getl egal status for cooperatives, not because they were keen to be regulated, but so that they were able to obtain public support. International organisation shave since recognised that cooperative law is the basic ingredient needed to build cooperative friendly policies.

Cooperatives and other fields of law

  1. Gemma Fajardo (Author)

    PROPOSALS FOR BETTER GOVERNANCE IN WORKER COOPERATIVES

    The purpose of this paper is to make a few contributions to designing a more appropriate legal framework for worker cooperatives. Cooperatives and Employment: a Global Reportpublished in 2014 by CICOPA and the Desjardins Group, provides the starting point for this article. I have analyzed from this study the characteristics of cooperative employment, their impact on the economic sustainability of cooperatives and the proposed recommendations.Iconsider the existence of a specific legal status for cooperative employment unfeasible. It is impossible to find unity in such different activities as salaried work and self-employed work, whether individual or collective. The idea that a worker member has the same status as a salaried worker cannot be accepted.We need to accept that a cooperative is a particular form of business organisation and that there are specific cooperative relationships which cannot be classified as work contracts, based precisely on the undertakings the worker enters into on becoming a member of the cooperative. Cooperatives should be governed by a specific and appropriate legal system that respects the cooperative principles and values and allows cooperatives to develop autonomously, always respecting the fundamental rights of the individual.

  2. Ifigeneia Douvitsa (Author)

    NATIONAL CONSTITUTIONS AND COOPERATIVES: AN OVERVIEW

    The national constitutions as the supreme laws of countries are expected to influence the interpretation and application of ordinary laws to varying degrees. Moreover, they tend to be permeated with political considerations, ideas, ideals and ethics more than other legal texts. Theyhave also the potential to enforce supranational norms in the domestic legal order. For these reasons, their study may reveal valuable information about the national legislator‘s stance and perception towards cooperatives. Thus, the present article undertakes a large-scale inquiry on the topic of constitutions and cooperatives. In particular, it examines which and how many countries have introduced in their constitutions cooperative-related provisions, under which content and whether any particular trends can be noted. With regard to the potential impact of such constitutional provisions on ordinary law, the case of Portugal and Italy isexamined.

Legislation

  1. Willy Tadjudje (Author)

    THE EAST AFRICAN COMMUNITY’S COOPERATIVE REGULATION

    Since 2014, a new legal framework governing cooperative societies has been in force within the East African Community. The Act was adopted through a concerted procedure involving all interested parties. The Act replaces national provisions of Partner States, except for complementary and non-contrary provisions. The aim of this analysis is to present the main articulations of this regulation.

  2. Akira Kurimoto (Author)

    JAPANESE CO-OPERATIVE LEGISLATION: ITS CHARACTERISTICS AND THE IMPACT OF RECENT LEGAL REFORMS

    Japan‘s co-operative economy has a sheer size: agricultural co-ops are the world-class organizations ranked as the largest ones in the World Cooperative Monitor while consumer co-ops have 27% of turnover and 71% of membership of their European counterparts affiliatedwith the EUROCOOP.But co-operatives are operating under fragmented co-operative legislation regulated by different competent ministries. There are more than 10 industry-specific co-operative laws regulated by different ministries. The competent government department‘s approval is required when co-operatives are incorporated, merged or liquidated. There are no legal instruments for workers' co-ops despite strong campaigning for decades. There is no common public policy and there are no official statistics on co-operatives and co-operatives have no super-structure among them. The evolution of co-operatives adapting to different socio-economic contexts and legal environments over 70 years has resulted in contrasting organizational cultures and political affiliations. The agricultural co-ops grew as the agency for implementing protectionist policy, heavily supported by the government while the consumer co-ops endured small retailers' anti-co-operative campaigns without any support from the government. The former co-operatives are top-down organizations and support the ruling conservative party while the latter societies are bottom-up organizations and often support the opposition camp.As a result, these co-operatives have little identity among them,nor recognition as a distinguished sector. The Consumer Co-operative Act was amended in a positive direction for the first time in 2007 while the Agricultural Co-operative Act was revised to dismantle their privileges in 2015. Do these legal reforms have an impact onco-operative activities and co-operative identity? This paper starts with a brief history of co-operative legislation. It will explain the institutional framework of agricultural co-operatives (Jas) and the reform of the Agricultural Co-operative Act in 2015. Then, it will do the same for consumer co-ops. Finally, it discusses the characteristics of Japanese co-operative laws in the light of the Principles of European Co-operative Law (PECOL).

Court Cases

  1. Itziar Villafañez Perez (Author)

    A BRIEF CHRONICLE OF AND SOME NOTES ON THE BANKRUPTCY PROCEEDING OF FAGOR ELECTRODOMÉSTICOS S.COOP.

    After the announcement of its insolvency on the 15thNovember 2013 Fagor Electrodomésticos S.Coop. (a worker cooperative based in Arrasate-Mondragón, Basque Country, hereinafter ―Fagor Electrodomésticos‖) presented an application for its declaration of bankruptcy. That was accepted by the Commercial Court n. 1 of Donostia-San Sebastian (Juzgado de lo Mercantil número 1 de Donostia-San Sebastián) the 19thNovember.

Practicioners’ Corner

  2. Cliff Mills (Author)

    REFRAMING THE DEBATE ABOUT COOPERATIVE CAPITAL

    I have been working with cooperatives for about 25 years now.From my first encounter, I have been fascinated by the idea of trading for the benefit of everybody and anybody who wishes to engage, and I have reflected frequently on the marginal role played by cooperatives today in my own country, even though the UK played such a big part in the establishment of cooperation.

  3. Holger Blisse (Author)

    COOPERATIVE AND (CAPITAL) MARKETS –MEDIATION OF MEMBERS’ SHARESBY AN ONLINE-PLATFORM

    In Austria, the idea of crowdfunding has been linked to a cooperative: CrowdCoopFunding eG (eG: eingetragene Genossenschaft, i.e. registered cooperative) –a crowdfunding platform (https://crowdcoopfunding.at) –emerged from an initiative of the Austrian Association of Cooperatives(Schulze-Delitzsch) (Binder, 2015), which offers its members theopportunity to raise equity capital. This is realized by mediation, which is advertised as a form of investment with the invitation ―buy shares‖. The platform is addressed to existing cooperatives to expand the group of members as well as to new cooperatives (start-up-coops).

  4. Yifat Solel (Author)

    FROM SOCIAL PROTEST TO LEGISLATION: ISRAEL'S NEW CREDIT UNION LAW

    On December 22nd 2016 the Israeli Parliament passed The Supervision of Financial Services (Regulated Financial Services) Law, 5776-2016 – allowing the establishment of credit unions in Israel for the first time in half a century. The bill was brought as a governmental initiative – after a five years struggle of social activists who were determined to promote the idea of cooperative financial institution and its implementation.
    This all started with the social protest of 2011 which evoked the need for a major change in the highly centralized and very expensive banking system. OFEK cooperative society was established in 2012 setting a goal of starting a cooperative bank. During the five years since then, governmental committees have risen and faded and many statements have been made in favor of the idea only to collapse into concrete decisions that would prevent it.
    The former Supervisor of the Bank of Israel decided to prefer "stability" over "competition" – announcing the regulation of financial cooperatives would require equity capital of 75 million NIS (about 18 million €) prior to licensing and after expenses – which meant that the cooperative must raise about 40 million € from members - an impossible mission.
    It was only when a new Supervisor of Banks was appointed that the barriers were lifted - as she announced that small financial institutions present no threat to the stability of the market, and should be supported by enforcing as little regulation as possible, in order to encourage them to operate. A new challenge then began. This would be the first cooperative law ever enacted in Israel - the
    Cooperative Societies Ordinance was promulgated by the British Mandate. The challenge was how to make sure that the new law would be based on cooperative values and principles.