SACP Welcomes New Start for Co-op Movement in South Africa

There has been a strong commitment to co-operative development in South Africa since the end of apartheid. All the Tripartite Alliance partners (the ANC, COSATU & SACP) have a commitment to building co-operatives. As far back as 1998 the Alliance Summit adopted the program Unity in Action, which placed co-operatives firmly on the agenda.

It would be understandable if amongst the wider black population there was less enthusiasm for co-ops. For many years particularly in the agricultural sector they bolstered white power. Beginning in the 1910’s and 20’s, they focused on input supplies and joint marketing; and establishing processing co-ops. They became a powerful lobby holding a virtual monopoly in key agricultural sectors, backed by ready access to finance through the Land Bank, and controlling the Marketing Boards that regulated prices until this system was dismantled post-apartheid.

A classic example is KWV which came to dominate the wine and spirits industry. Formed in 1918, by growers in the Western Cape the Kooperative Wijnbouwers Vereniging van Zuid-Afrika became a giant in the industry. As apartheid collapsed so did its marketing and regulatory functions leaving behind a mistrust of the Co-operative brand amongst black farmers and wine growers that has taken a long time to change. Today there is a small inclusive co-op sector supported by fair trade and foreign co-operative organisations like the German Co-op Movement and the UK’s Co-operative Group who support the Du Toitskloof wine co-operative in the Breede River Valley.

The history of financial mutuals goes back further still. Old Mutual the South African financial giant was founded by Scotsman John Fairbairn in 1845 as the Mutual Life Assurance Society of the Cape of Good Hope it began with no initial capital other than the premiums of its first 166 policyholders. As you may expect at that time they where all white. Following demutualization in 1999 and a listing on the FTSE it has become one of the worlds leading financial businesses on the back of a dominant position in South Africa.

In its early days it enabled white farmers to build up their businesses offering insurance and savings to weather the ups and doubts of agricultural markets. What was wrong with these organisations was not their co-operative nature but their failure to adopt the key co-operative principle of open membership. The things they did to enable small producers to gain economies of scale and less affluent communities to gain access to finance are needed today more than ever. Co-operatives like trade unions are not inherently progressive. They have the capacity to be so but can be corrupted into advancing the rights of one group over another.

The concrete situation in South Africa today means that with now with the right legislation co-operatives can play a positive role in fighting unemployment and poverty. Despite the end of apartheid the economy is still dominated by largely white owned corporations and whilst Black Economic Empowerment has propelled a relatively small number of blacks into top positions in these corporations much of the black working class has been left behind.

It was a welcome move therefore in response to the UN Year of Co-operatives that last month SA Trade Minister Rob Davies addressing the International Co-op Day celebrations in Kimberley announced a new development agency would be established as a result of the Co-operatives Amendment Bill. A body for both financial and non-financial support "tailor-made for co-operatives", he said. "These will include administration of incentives, provision of training and improvement of working conditions in the co-operatives sector." He added, "The proposed institutions will then assist the government to reduce the mortality rate amongst co-operatives and ensure their sustainability."

Mangaliso Stalin Khonza, National Spokesperson for the Young Communist League said in response he hoped “That implementation will be speedy and not get delayed by bureaucracy. The co-operative agency will go a long way in ensuring that co-operatives do not remain an option only for cleaning, public school feeding schemes and other basic services. The Agency must ensure that the co-operatives are capacitated in terms of skills and resources to operate fully even in the commanding heights of the economy such as banking, mining and IT.” He went on, “It is well known fact that co-operatives can serve to curb the increasing unemployment particularly amongst the youth and will further ensure the communities are directly responsible in their own service delivery and development; unlike the corrupt entrepreneurial system which serves to illegitimately profit uncaring entrepreneurs.”

If any country needs its wealth spreading more fairly then it is South Africa. The country has a Gini Coefficient, which measures inequality, amongst the highest in the world and as the economy has grown wealth distribution has worsened. Whilst a larger and thriving co-operative sector cannot solve this problem alone it could make a significant contribution. There is an awful lot of work to do in changing attitudes and educating the people, I recently had the chance to see the work the UK’s Co-operative College is doing in training Co-operative trainers in KwaZulu Natal, the state with the highest concentration of worker co-ops in the country, this is impressive but it is a small program considering the scale of the task.

Co-operatives can make a difference in undertaking work contracted out by local government where there has been a huge problem with corruption. In his address to the SACP’s 13^th Congress on July 12^th Blade Nzimande, Minister for Education and Training and SACP General Secretary said that to help the sector grow, the SACP is.. “calling for effective state support for the co-operative movement, including setting aside certain functions in the state (eg. school nutrition, cleaning services, etc) exclusively for cooperatives.”

A strong commitment by the SACP means this new found commitment to co-operatives has a chance of working and I look forward to a thriving co-op sector that serves all of South Africa’s people.

Co-operation, Cricket and Class

The perception of co-ops in Britain has changed tremendously over the last few years. There is a clear generational demarcation in the perception of co-ops particularly as a retailer. For my grandparents they fed and clothed them through the war and they could, until they became customers of Co-op Funeralcare remember their divi-numbers, for my parents they where old fashioned and closing down, yet now for the young people I teach in the University they have in some cases like the Co-op Bank, John Lewis and some of the funky new co-ops become sexy.

Not a term many of us in the movement have had applied to us very often, if at all.

As well as this generational difference in attitudes towards Co-op’s and co-operation there also seems to be a class difference. I was thinking about this because the Government of posh boys is always going on about the John Lewis model or employee ownership but rarely use the term’s co-op or co-operative.

This is ironic because often it is the better off that nowadays seek to co-operate to improve their lot whereas it is much more difficult to get those who really need the benefits of co-operation lower down the social and economic pile to do so.

Internationally co-operative housing, for example, is a common form of tenure yet in the UK housing co-ops have failed to take off often because they are lumped into the social housing space and have historically gone into battle, as a more complex form of tenure, for investment with housing associations, which at least to outsiders appear to be doing similar work.

The truth is that for investors and tenants the co-operative housing model is a terrific way of taking the risk out of housing for many people who for whatever reason cannot engage in, or do not want, the hassle of owner occupation.

Compare this with the situation in the United States where some of the world’s most exclusive housing is in co-operative ownership.

Indeed some of the famous New York Co-op Boards that select tenants are notoriously picky. Well known figures such as Madonna, Carly Simon and Calvin Klein have in recent years been turned down for membership of some of New York’s more exclusive housing co-operatives.

This class issue once again came to mind when I read that the Marylebone Cricket Club was consulting its members on a new structure. This follows an acrimonious debate within the MCC about the redevelopment of the ground. The project was called “A Vision for Lords” and it involved the building of luxury flats at the nursery end of the ground.

This however was not a vision shared by the membership of the club who rejected it. As a result of this row one prominent member of the project committee, Sir John Major, resigned complaining about the way the decision had been taken.

One thing the potential development highlighted was the sheer precariousness of the club’s existing legal structure. As an unincorporated association the club is not a corporate entity and cannot therefore own property, including the ground itself, and the members are joint a severally liable if they ever get sued!

The club have put forward a solution to this legal weakness and have decided that they should ask the Queen for a royal charter of incorporation a bit like the way Universities are established. A rather complicated and rather long winded solution you might think.

Of course there is another way forward, one that does not require any grovelling to Buck House, and that is taken by virtually all of the other county cricket clubs in the country.

That is to form an "industrial and provident society", or a co-op in a letter to members they say, "Although some first-class county cricket clubs have chosen this method to incorporate," they add somewhat sniffily, "the working party thought that such a method would not appeal to members of the club. Traditionally, this route was used to incorporate working men's clubs."

Well this method is also the one that is the legal basis across the river of Sir John Major’s beloved Surrey County Cricket Club, one of the UK’s top one hundred co-op’s. So I would like to think this is why Sir John fell out with the clubs management, although I doubt it.

The Industrial and Provident Society , the co-operative model, is the legal form of the Club I am a member of, Leicestershire, and a quick check tells me it is the legal form too of the following County Cricket Clubs, Kent, Worcestershire, Warwickshire, Glamorgan, Lancashire, Gloucestershire, Essex, Yorkshire, Somerset, Derbyshire, Sussex ,Hampshire and Nottinghamshire.

To add insult to injury for MCC members it is the legal basis of Middlesex County Cricket Club. Many MCC members are also members of Middlesex who have the privilege of sharing Lords with the MCC.

If the members of the MCC have any brains and really want to protect the club from the toffs who think they own everything in this country they should vote for the co-op option. Importantly it protects the club’s democratic nature, maintaining member control and ownership. After all it has served many businesses well over the years some of which have been around almost as long as the MCC.

Oh and yes it is also the legal basis for many Working Men’s Clubs and if it helps for many Conservative Clubs too!