KAMPALA, September 27, 2024 –The Pan African Parliament [PAP] recently adopted the Model Law on Cooperatives which will serve as a framework to guide the development and review of cooperative legislation across the continent.
The PAP has agreed to develop an African model law on the cooperative business model due to its potential of empowering people socially and economically, says Dr. Chiyoge B. Sifa, Regional Director ICA-Africa who has shared a copy of the Law with this news website.
The Process of developing the Model Law
At the First Ordinary Session of the Sixth Parliament of the Pan-African Parliament, held in Midrand, South Africa in November 2022, the Pan-African Parliament resolved to develop a model law on cooperatives for Africa based on a proposal presented by the International Cooperative Alliance – Africa Region [the Alliance Africa].
To achieve this goal, the Alliance Africa, the Moshi Cooperative University [MoCU], based in Tanzania and the Secretariat of the PAP worked jointly to provide drafting and technical support to the Committee on Finance and Monetary Affairs.
In developing the model law, the drafters drew inspiration from national and international instruments including the International Cooperative Alliance Statement on the Cooperative Identity, the United Nations Guidelines aimed at creating a supportive environment for the development of cooperatives, the ILO Guidelines for Cooperative Legislation, the ILO Promotion of Cooperatives Recommendation, 2002 (No. 193), the ILO Cooperatives (Developing Countries) Recommendation, 1966 [No. 127], the East African Community Cooperatives Bill of 2014, and the OHADA Uniform Act on Cooperatives, 2010.
Moreover, the draft Model Law is also informed by cooperative legislation in African countries and other parts of the world for the purpose of gathering best practices, good standards and emerging aspects relating to cooperatives. In addition, published scholarly works on cooperatives generally and cooperative law, in particular, were also consulted and provided rich ideas that helped to shape this draft Model Law.
Besides, significant inputs were obtained from the International Cooperative Alliance Cooperative Law Committee and the PAP Legal Office. Moreover, the findings of the ICA’s Legal Framework Analysis study were useful in enriching the letter and spirit of the Model Law. The first draft of the Model law was presented before the PAP Committee on Finance and Monetary Affairs in March 2023, where it received inputs which enabled to improve the draft and recommend it for submission for first reading and consideration by the Plenary.
Once considered in Plenary, the draft Model Law will proceed to get for regional and/or technical consultations, to gather integrate the contributions, aspirations and concerns of peoples and organizations that may be interested in or affected by the draft of this Model Law.
Scope and purpose of the Model Law
Given the fact that the Model Law is meant to be a guideline or template in developing and reviewing cooperative legislation, it only covers key aspects that largely aim to make cooperative law member-centered. The framework of cooperative legislation should aim at ensuring members of cooperatives get the best out of it. The model law does not detail much of the procedural aspects, which can be included in subsidiary legislation and cooperatives’ operational and governance instruments taking into account specific national contexts.
The Model Law will serve the following core objectives:
[i] Guiding the development of new cooperative legislation and the review of existing ones. There are countries that do not have cooperative legislation in place. The Model Law can be an impetus towards adoption of new legislation. Moreover, on the basis of the Model Law, existing laws can be improved to reflect current demands and trends. [ii] An advocacy tool for development and review of cooperative legislation. In developing and reviewing national legislation, it is not uncommon for countries to avoid copying ‘things’ from other countries. The Model Law will stand out and be viewed as something superior to national legislation. In this sense, it will be easier for advocacy groups to use it in pushing governments to either enact new laws or review the existing ones. [iii] Compilation of best practices. The Model Law is a compilation of best practices. It will therefore be a ‘one stop center’ for those who wish to draw on best practices in developing or reviewing cooperative legislation. [iv] The Model Law will be a catalyst for harmonizing cooperative legislation and practice in Africa. In so doing the cooperative movement in Africa will have the potential for greater integration, harmonization and collaboration.Conclusion:
Worldwide, cooperatives have been identified as ideal organisations for empowering low-income earners and poor people. They provide appropriate and fair frameworks for mobilising meager resources for attaining economies of scale and ultimately bigger economic gain. They also help to achieve financial inclusion, especially in rural areas, for they offer credit services at reasonably affordable costs.
However, for cooperatives to play these roles optimally and meaningfully, a conducive environment must be put in place by enabling laws. In this sense, cooperative legislation must not only recognise and protect the identity of cooperatives, but also create a conducive environment for the establishment and operation of cooperatives.
This draft Model Law is purposed to provide a normative framework that empowers cooperatives to be truly member-based organisations, which meet members’ needs and aspirations, optimally contribute to national and continental development, and play a meaningful role in achieving African and global social and development goals. The Model Law aims to make cooperative legislation member-centered and insists on the ‘eyes on, hands off’ approach in regulating cooperatives.
Details here: Model Law on Cooperatives for Africa
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