Incorporating International Platform Cooperatives in the Global South

Winning Entry in the 2012 International Year of Cooperatives poster making competition. Winning poster designed by Collage-No cooperative in Valencia Spain

Winning Entry in the 2012 International Year of Cooperatives poster making competition. Winning poster designed by Collage-No cooperative in Valencia Spain 

As part of my research as a 2023/2024 ICDE fellow, I argue that a significant and often overlooked factor impeding the advancement of cooperative societies in the so-called global south is the lack of internationalization of membership within these enterprises.

The cooperative enterprise has been defined internationally and legally recognized since 1995 and 2002 respectively. It distinguishes ‘the cooperative’ from other forms in terms of the democratic control exercised and the joint ownership enjoyed by persons who assume the responsibilities of membership in a cooperative. With responsibilities come rights, and the cooperative is one of the consequences of the association of persons, natural or otherwise, whose economic, social, and cultural needs and aspirations are common, and who decide to address them collectively often through written agreements such as Articles of Association, Bylaws etcetera. Irrespective of the geographical and political diversity in the laws which govern nations of the world, the basic structure of the cooperative or the understanding thereof, does not change worldwide, especially in laws adopted after 1995. The wide acceptance of this basic structure was validated with the implicit mention of cooperatives as the first pillar of the Social and Solidarity Economy (SSE) in the UN Resolution A/77/L.60 on Promoting the Social and Solidarity Economy for Sustainable Development (2023) and the foundational work of the ILO office in developing a definition of SSE in the ILO Report on Decent Work and the social and solidarity economy (2022).

Late 20th century economic reforms intended to expand state-dominated economies in the global south did not proactively focus on cooperatives. At the same time Cooperatives in the global north plied in agile legal environments with the essential role of the state limited to the creating an environment and facilitating access, which was at par with that available to other enterprise types. While in the last 30 years have germinated the thinking on “companization” of cooperatives in the global north, I argue cooperative in the global south have failed to thrive in business innovation and struggled to proliferate independently of enhanced state influence, such as sectors with strong industrial policies and subsidies. It is also important to mention although cooperatives in advanced economies with higher GDP per capita, broadly tend to ply in business environments equivalent to those extended to other types, they do enjoy an essential relationship with the state, which has thus far respected legitimate rights and roles cooperatives deserve due to their community oriented nature and member-mutualistic character. Having said that, the continuing delay in adopting adequate forward-looking policies for cooperatives in erstwhile state-heavy economies in the global south has hindered cooperative development. Certain sectors, such as artisans in handloom and urban consumers in consumer retail have suffered heavily due to the closure of their cooperative societies in India due to inadequate policies and high level of state influence in the cooperatives’ business. Meanwhile, these same sectors have experienced significant growth through private sector enterprises in these countries.

A frequent feature in cooperative laws of advanced economies is the relatively relaxed take on near/equal membership of foreign persons in a registered cooperative. Despite the questions around the impact of scale and size on member-democratic control in cooperatives, there are some noteworthy examples of cooperatives achieving a wholesome international character in the advancement of the interest of their members.  Oikocredit Ecumenical Development Cooperative Society (EDCS) in the Netherlands is one such example, which was founded in 1975 and calls itself a worldwide cooperative answering the ethical investment question and need for a channel that supported peace and universal solidarity. Another example is Magnum photos which was founded in 1947 as a cooperative by photographers Robert Capa, David Seymour, Maria Eisner, and others who formed the then transatlantic membership of the cooperative, which now comprises hundreds of full photographer-memberships. A good example of international distributed platform cooperatives, is Stocksy United with about 1,800 photographers in 67 countries, including some in the Global South. Cooperative laws in the global south generally do not include provisions for “international cooperatives,” making it difficult for cooperative enterprises to engage in cross-border exchanges through membership.”Cross-boundary associations and representative unions do exist at secondary/higher levels but enterprises with international membership of persons, natural and legal, are not seen in the global south, whereas international cooperative structures or/and cooperatives with membership of non-nationals are not uncommon in the European Union, USA, and Canada. The Uniform Cooperative Societies Act, 2011 applicable in the OHADA member states in Africa, though different in character from the European Council Regulation on the European Cooperative Society, 2003, does permit cross-border cooperatives and membership.

Street in Bonn, Germany named after F.W. Raiffeisen, cooperators and social reformer, where the offices of the International Raiffeisen Union is located.
Street in Bonn, Germany named after F.W. Raiffeisen, cooperators and social reformer, where the offices of the International Raiffeisen Union is located.

Another equally important issue in the global south which is closely related to the impediment of domiciliary restrictions to membership in cooperatives, is the issue of underutilization of other legal forms which can accommodate the cooperative spirit through internal rules in advancing platform cooperativism. Forms such as the Limited Liability Companies and Organizations must be actively given a chance to advance platform cooperatives for the agility and adaptability the platform economy requires. This proposition emanates from the equal treatment principle, where cooperatives, as companies must have options for their legally registered forms if the basic structure is maintained through internal rules.

In my research for the ICDE, I will be examining the perceived gap in internationalism of cooperatives in their enterprise form in the global south. If this gap is indeed valid, it will be analyzed through the lens of the legal obligation of cooperatives to work towards the sustainable development of their communities via policies approved by their members. Complementarily, I will explore the potential of platform cooperatives to tangibly participate in accelerating sustainable development at the international level. In addition, I shall explore the tenability of cooperatives particularly of workers organized as LLCs with adequate Bylaws in countries in the global south.

In other words, I will be analyzing the gap of international cooperative membership and enterprises in the global south in the context of platform cooperatives putting into practice the ethical values of social responsibility and caring for others through the practice of the 7th cooperative principle on the Concern for Community, while discussing in the paper, the freedom of platform cooperatives in choosing their legally registered form. This analysis will be particularly relevant beyond national boundaries due to the global nature of the common problem of environmental degradation.

The process of globalization and international cooperation has highlighted the potential consequences of environmental degradation on our planet and its inhabitants for over 50 years. The scientific and political pieces of the puzzle were brought together in 1972 when the United Nations Conference on the Human Environment adopted the Declaration in Rio de Janeiro, which aimed to inspire and guide people worldwide in preserving and enhancing the environment. The concept of sustainable development was universally adopted at the 1992 Earth Summit, also in Rio. During the 30th World Cooperative Congress in Tokyo, Japan in 1992, cooperatives discussed ways to integrate sustainable development into their identity and values. This led to the adoption of the Statement on the Cooperative Identity at the centennial World Cooperative Congress in 1995 in Manchester, the U.K.

Street in Bonn, Germany named after F.W. Raiffeisen, cooperators and social reformer, where the offices of the International Raiffeisen Union is located.
Taxi cooperative in Thailand which receives support from the national apex cooperative.

My research would develop the hypothesis the 7th cooperative principle has not been fully operationalized due to inadequate legal and policy frameworks as well as lack of initiatives at the international level, and argue the burgeoning interface of cooperatives and internet-based platforms, can be useful in steering cooperative-action towards safeguarding the environment, by permitting membership of foreign persons in platform cooperatives in the global south, as well as explore ways of incorporating platform cooperatives in countries where they cannot be legally recognized as cooperatives.

Views expressed here are solely of the author and are not to be construed as that of the International Cooperative Alliance