The theme chosen for this year’s International Day of Cooperatives – celebrated yesterday – is ‘Cooperative enterprises achieve sustainable development for all’.
Sustainable business involves the integration of environmental, economic and social dimensions in all its activities and that of its members. Cooperatives are a democratic way of doing business together; they put the person, rather than money, at the centre of their operations.
The main focus of traditional business models is profits. In cooperatives, the main emphasis is on shared value. The cooperative business model, which is based on values such as self-responsibility, democracy, equality and solidarity, promotes a more sustainable and responsible operation, while combining economic competiveness with social and environmental needs.
In a resolution adopted in December 2001, the UN urged governments to encourage and facilitate “the establishment and development of cooperatives, including taking measures aimed at enabling people living in poverty or belonging to vulnerable groups to engage on a voluntary basis in the creation and development of cooperatives”.
We need sustainability more than ever. In the quest for wealth, we compromise the long-term benefit for short-term gain. This way of life affects decisions taken both on a personal level, as well as on a communal one.
Cooperatives around the world are proven to be a very effective tool for sustainable activity that benefits both its members as well as the community. Cooperatives are the only business model that have concern for community as one of their basic principles. This should not be confused with corporate social responsibility, that tries to give back what has been taken from the community itself in the first place. Concern for community stems from the fact that cooperatives are local in nature, and they empower individuals to come together and work to provide goods and services that benefit themselves and their communities.
Examples abound. A group of villagers in the UK took over their only local brewery and pub to prevent it from shutting down.
Last year in France, around 1,800 people who would otherwise have become unemployed, launched new worker cooperatives. The Italian social cooperative Progetto Quid was one of the three winners of the European Social Innovation Competition, organised by the European Commission. Progetto Quid is a new Made in Italy brand that creates collections, assembling and restyling top quality unused materials in partnership with young emerging designers, whilst exclusively employing disadvantaged women. In Spain, worker cooperatives are currently creating net employment, in a country where there are five million people unemployed.
Today, cooperatives provide almost 40,000 jobs to disadvantaged citizens that can be found across Europe. The European Commissioner for Employment, Social Affairs and Inclusion, László Andor recently stated: “Cooperatives hold powerful tools for social innovation”. These examples are the tip of the iceberg, considering that around one billion people – or one in six of the world’s population – are members of a cooperative.
In Malta, cooperatives have been operating since 1947, and around 60 co-operatives achieve an annual turnover of around €70 million. There are around 2,500 persons who are cooperative members in Malta. This is far from optimal, considering that in Cyprus which founded its first cooperatives in the same year as Malta, half the population is cooperative members.
We need to strive to improve this situation. Around the world, cooperatives provide sustainable employment, generate significant economic activity, and empower the lives of millions. They operate in diverse sectors of the economy, from agribusiness, to media, renewable energy, electronics, retail and finance. In Malta, we have not yet been able to seize on the opportunities that have come our way. The result is that on average, we have not been able to register one cooperative enterprise every year.
The upside to all this, however, is that the potential for the cooperative business model in Malta is enormous. For this potential to be harnessed and become reality, all stakeholders have a direct responsibility. These include cooperators themselves, their cooperative societies, their cooperative federations, the government, as well as educational institutions.
Current cooperatives need to become increasingly proactive. They need to work together and explore creative ways of doing business. The movement needs to move away from the system whereby the traditional school tries to be inclusive to new, visionary and creative cooperative methods; if we are to create a bigger and more relevant cooperative movement in Malta, we need to work the other way round. There are many valid, positive and innovative people in the cooperative movement. This energy needs to be harnessed. Individual cooperatives need to move more and more towards self-regulation, and the best practice stories need to be shared.
The Malta Cooperative Federation is working hard to move towards increased quantity, as well as quality levels of cooperation. We are not really interested in the number of member societies we have on our books, but rather, the quality of these cooperatives to provide sustainable value to their members, their families, and the community at large.
Every initiative needs a champion. In this sense, government has a pivotal role. We need to create the necessary legislative tools to make it easier for co-operatives to operate and build their strength based on the cooperative principles. We need to make sure that the process of changing cooperative legislation picks up pace. The Malta Cooperative Federation has been very proactive in this regard, and has presented its proposals to the government. The federation is eager to engage in discussions that can result in a proactive and positive legislative framework, relevant to the challenges that we are experiencing and might experience in the future.
Through the necessary amendments to the Central Co-operative Fund regulations, government is encouraged to put in place the federation’s proposed legislative mechanisms necessary, to fairly allocate the available cooperative funding. Above all, these mechanisms need to lead to a value-for-money situation, where cooperative organisations are in a position to operate, and investment is directed at proactive work, innovative ideas, and target-based implementation.
Nothing happens on its own. If we are to see a more relevant and innovative cooperative sector, we need to cooperate effectively in a scenario of diversity. The Malta Cooperative Federation’s vision is working towards modernising the perception of the co-operative business model based on the seven cooperative principles, in particular inter-cooperative cooperation and concern for community. These principles, based on education, self-regulation, and ethical business, are the guiding light for the expansion and success of cooperation in Malta. All we need is the necessary tools to be able to facilitate and exploit the vast potential of cooperative enterprises in new and innovative sectors.
john.mallia@maltacooperativefederation.coop
John Mallia is the president of the Malta Cooperative Federation.