The Co-operative Year 2012

2012 was thanks to its United Nations Designation as the Year of Co-operatives, one of celebration for the Co-operative movement. That was certainly something worth celebrating but it would have been less of a celebration if the UK sector had not performed so well.

For the fourth year in a row the co-operative economy has out performed the overall UK economy. Despite the fact that economic conditions for all sizes of co-op’s in all sectors are, thanks to the unresolved banking crisis and the efforts of the economic management of the ConDem coalition to make a bad situation worse, the toughest we have seen in our lifetimes.

Against this backdrop some co-operative businesses have been real star performers like the Co-operative of the Year, Midcounties, one of the larger retail societies, trading in food, pharmacy, funerals, childcare and now energy. Their outstanding energy business, Co-operative Energy, has won numerous awards and now has over 60,000 customers. CEO, Ben Reid, has said: "It has been an exciting 12 months as we have developed and expanded our food, energy, childcare and travel businesses in particular. We have had the confidence to invest and diversify despite the challenging economy because we believe in the co-operative way of doing business. Winning Co‑operative of the Year is a fine endorsement of our approach."

If you haven’t checked out Co-operative Energy yet supplying households with their gas and electricity and the only suppler to CUT its prices this winter I suggest you do so. Another outstanding performer has been the Wine Society, supplying high quality wine at fair prices, receiving the Decanter Award as National Wine Merchant of the Year for the second year running.

The Co-operative Banks capture of 632 former Lloyds Bank branches is also something of a coup and completely changes the scope and reach of the Co-op Bank. This was clearly a tough call for the Co-op Group but to achieve this level of growth organically would have taken decades.

The Co-op Bank has been a great success, it never required any government support but has still been hit by tough new regulations requiring greater capital adequacy, a significant contribution to the banking compensation scheme and having to set aside millions for PPI miss-selling despite the fact it hardly sold any, the price of defending yourself against no-win, no fee lawyers, all these costs means bank profits will be hit in the short term. 

Other star performers include, small co-op of the year, Equal Exchange, a fair trade workers co-op, dating back to 1979 when three voluntary workers returned to Edinburgh after working on aid projects in various parts of Africa. Their belief was that aid was not the only answer and direct, fairer trading could help redress the balance. Today they have a great range of quality products helping producers across the developing world, including an excellent Palestinian olive oil.
As a fan of supporter owned football clubs I was delighted when FC United, won the #coops2012 Award, for the co-operative which has actively used a variety of media (radio, press and social media) to promote their co-op. Their innovative use of social media to engage with its fan base is quite stunning. To date they have raised over £1.7million in a Community Share Issue by using every channel to talk to their members and supporters. Their communication strategy has real purpose as Andy Walsh, FC United's general manager, said: "The club's media work not only helps spread the word about FC United and supporter-ownership, but also gives many of our co‑owners the chance to be involved, develop their own skills and take responsibility for running an important element of the club."
The final major event of the International Year, Co-ops United in Manchester, was great fun and attracted almost 12,000 visitors with 200 Co-ops exhibiting including the Peoples Press Printing Society. The history of the sector was not neglected in the year with a super Lottery Heritage Fund refurbishment of the Rochdale Pioneers Museum and a new version of the film of the Pioneers.
One last highlight in a year of highlights was the publication of the, The Co-operative Revolution, a graphic novel that vividly explores the history of the co-op movement and its spread across the world and then takes an optimistic look at the co-operative world in 2044 the 200^th anniversary of the Rochdale Pioneers. Published by co-operative New Internationalist with the support of the Co-op Group at just £5.99 it makes a great stocking filler.
There is no doubt that this year people have started taking the co-operative business model more seriously and as Victor Hugo said, there is nothing more powerful than an idea when its time has come. And after the satire of the Nobel Peace Prize, being awarded to Henry Kissinger, Menachim Begin, Barack Obama and now the European Union we should campaign in 2013 to get the Prize for a genuinely peace promoting international body, the International Co-operative Alliance, they could certainly make good use of the prize money!

Co-operatives United

 Wow! Co-operatives really lit the blue touch paper in Manchester for the Co-operatives United festival to mark the culmination of 2012 as the UN year of Co-operatives. What a celebration, Co-operatives United together with the International Co-operative Alliance Expo, generated some amazing statistics, there were 11,800 visitors, representing 88 countries, 753 co-operatives attended, 171 co-operatives exhibited (including the Peoples Press Printing Society), the whole thing made possible by 521 volunteers and returning £12.8 million into the north west economy.

Many international visitors took the short trip to Rochdale for the spectacular re-opening of the refurbished Toad Lane Shop and Museum or caught up with the new Pioneers film (to be shown on Film4). I was particularly pleased with this years Co-operative Congress and the Co-op awards partly because my Society, the Heart of England Co-op Society, sponsored one of them. The award winners where from quite a cross section of the movement, a fan owned football club, a large retailer and a fair trade workers co-op. Organised by Co-operatives UK, the awards were announced at the international gala dinner in front of 900 people.

Miidcounties Co-operative, one of our larger retail societies, trading in food, pharmacy, funerals, childcare and now energy, won the Co-operative of the Year Award, sponsored by Cobbetts LLP – for overall performance excellence. Their outstanding energy business has won numerous awards and now has over 60,000 customers. Ben Reid, Chief Executive of Midcounties said: "It has been an exciting 12 months as we have developed and expanded our food, energy, childcare and travel businesses in particular. We have had the confidence to invest and diversify despite the challenging economy because we believe in the co-operative way of doing business. Winning Co‑operative of the Year is a fine endorsement of our approach."

Equal Exchange, a fair trade workers co-op, won the Small Co-operative, Big Achiever Award, sponsored by Chelmsford Star Co-operative Society – a small, under £5 million turnover co-op that has made a big impact. The origins of Equal Exchange go back to 1979 when three voluntary workers returned to Edinburgh after working on aid projects in various parts of Africa. Along with a sister organisation in London, Campaign Co-op, they started buying instant coffee from Bukoba on Lake Victoria in Tanzania. As a result Campaign Coffee was born. The volunteers had seen how small scale farmers were getting into debt due, in part; to the appallingly low prices they received for their products. Their belief was that aid was not the only answer and direct, fairer trading could help redress the balance! Today many years later, after bigger campaigns, more education and better products finally reaching independent retailers and supermarkets, the three volunteers' dreams are beginning to be realised. They have demonstrated a continued dedication to packing fair trade products at source, adding revenues, employment and new skills to the developing world partners they work with making them worthy award winners.

My delight however was for FC United, the fan owned football club, who won the #coops2012 Award, which we sponsored – for the co-operative which has actively used a variety of media (radio, press and social media) to promote how their co-operative is building a better world through co-operation during 2012. Their innovative use of a broad variety of media to engage with its fan base, to promote their long term aim of changing football for the benefit of supporters, is quite stunning. And by using every channel to talk to members and supporters their communication strategy has real purpose as Andy Walsh, FC United's general manager, said: "The club's media work not only helps spread the word about FC United and supporter-ownership, but also gives many of our co‑owners the chance to be involved, develop their own skills and take responsibility for running an important element of the club."

These Co-op Winners offer a snapshot of the breadth and excitement of the modern co-operative movement, a movement which has a new spring in its step following the UN year. What is important now is to build on the terrific quality of the international contacts we have built to generate a commercial co-operative advantage one from the other. Key initiatives must include an international buying Group to enable co-op retailers to compete with the very biggest of our capitalist rivals.

The inspiration of some of the international examples we have seen should also encourage us to continue to develop new Co-ops in new sectors here in the UK. In the United States the umbrella of electricity co-ops, Touchstone, serves 30 million members everyday - so don’t tell me we can’t have a huge co-op energy sector here in the UK. Lots to do now to build on the UN Year of Co-ops!

WORLDSUMMIT OF CO-OPERATIVES 2012

 Last week I had the privilege of attending the World Summit on Co-operatives in Quebec representing Co-operatives UK. It was amazing to be amongst 2,800 delegates from 91 countries - including a number from the very healthy co-operative sector in Quebec. The Canadian cooperative sector as hosts did us proud and played a huge role in the success of the event especially key sponsors and facilitators the Quebec financial co-operative Desjardins.

As well as the main summit there was a 'future co-operative leaders' programme which ran alongside the official event with participation from young British co-operators, and the summit was preceded by a pre-conference academic event ‘Imagine 2012’ on co-operative economics supported by St Mary’s University of Halifax, Nova Scotia, where the Sobey School of management are world leaders in co-operative management education..

There was a very strong emphasis on understanding the range and scope of the global co-operative experience and part of this included the launch of nine studies – some of which added more value than others - produced in partnership with leading private sector professional service firms - some of whom, like McKinsey’s, lets face it are a bit of a surprise as they are not known for their advocacy of the co-operative model.

Former Labour MEP now President of the International Co-operative Alliance, Pauline Green, played an important role in holding the show together and there where other significant UK contributions, from Peter Marks of the Co-op Group, Ben Read of Midcounties Co-op, Vivian Woodell from Co-operative Phone & Broadband as well as Ed Mayo from Co-operatives UK.

’Imagine 2012’ with its theme of co-operative economics looked at traditional and current theory in understanding co-operative enterprise, but also looked the flaws in wider neo-liberal economics that seemed to dismiss or exclude co-operative solutions. The work of Nobel Prize winning Elinor Ostrom was celebrated and a major issue was the role of co-operatives in tackling the challenge of environmental sustainability.

What emerged from the official conference was a strong sense of relevance and confidence in the co-operative model.  For me reading that the top 300 Co-op businesses have a turnover of US$1.6 trillion then seeing them represented in a room made an abstract idea into a reality and was very uplifting. Seeing the reality of the size and scope of the global co-operative movement in the flesh was amazing.  At times, the mood felt a little self-indulgent, as many of the outside speakers seemed to have come to curry favour rather than to offer grounded support and advice.

Some of the challenges articulated at the conference are ones we know well, given the speed of market change, are co-operative businesses, agile enough and innovative enough? Are we bold enough in positioning ourselves as an alternative to shareholder companies? ... or is it the case that what fires us up doesn't necessarily work in the wider world beyond our members, where people just need to know who we are and what we do well.

It was great to meet with and listen to the examples of how co-operatives where facing up to their business challenges, the Texas Energy Co-op that was outperforming its private competitors by going back to the members, the Danish farmer cooperative that felt it could not operate in a dozen countries on the back of membership from just one and so is exploring minority external capital; and the delegation from Cuba, trying to plan for a new role for autonomous co-operatives in a more open but still socialist economy.

I had the pleasure of joining a group of Brits, Canadians and Cubans for a very lively dinner. We discussed everything from how committed Raul Castro was to co-op development, to all the practical issues of starting and managing co-ops, to the philosophical issue of could you have a non capitalist market economy?

This was a substantial Cuban delegation, typically boxing above their weight, including ordinary Cuban farmers, as well as government officials; but if there was one person who held our attention it was Professor Camila Pineriro Harnecker from the University of Havana who has edited a new book, Co-operatives and Socialism, A view from Cuba. The book a collection of essays makes the case for co-operatives as part of the solution to building a more equitable society.

Working with the Ministry of Light Industry she and her colleagues are making the case for the co-operative economy to be a viable alternative to the neo-liberal capitalist and the authoritarian socialist models currently in use around the world. Thanks to support from Canadian co-operators the book has been translated into English and Co-operatives and Socialism will be published by Palgrave Macmillan in December.

So far the United Nations Year of Co-operatives 2012 has been a tremendous opportunity to bring co-operators together as there is indeed much we can learn from one another and if we work together and support one another there is a great deal we can achieve. It is very important that this momentum is not dissipated and that the Co-op Year becomes the decade of co-operative development.

The next stop for this international Co-operative caravan will be at Co-operatives United, the World festival and ICA Expo in Manchester from the 29^thOct -2^nd Nov. I very much hope as members of Co-operatives UK, the Peoples Press Printing Society and its members will be there amongst the 10,000 visitors. For more information go to: www.manchester2012.coop

Pioneers on Film

That well known TV face John Henshaw has a key role in a new adaptation of the classic story of the Rochdale Pioneers being bought to our screens by the British Young Film Academy supported by the C-operative Group. This splendid initiative to give the Pioneers story a contemporary twist is one of the highlights of the celebrations of 2012 as the UN year of Co-operatives.

All social movements have their mythologies, the stories they tell themselves to explain their purpose and their origins. The co-operative movement is no exception and one of the most powerful in the working class movement is the mythology surrounding the Rochdale Pioneers. Whilst we know quite a lot about the pioneers and the formation of the shop at Toad Lane, Rochdale, in 1844 we owe their story, the creation of their story, is the work of one man. One of the greatest propagandists for working class emancipation that we have ever seen, George Jacob Holyoake, memorialised in the head quarters of the co-operative movement, Holyoake House in Hanover Street, Manchester.

There where many early co-operative societies before Rochdale and very many around at the same time but there can be no doubt that Rochdale was lifted into prominence by the work of Holyoake. His history of the Rochdale Pioneers written in 1857 made Rochdale the key place for modern co-operation, followed by his, The History of Co-operation in England in 1875, and The Co-operative Movement Today in 1891 these works made him the outstanding co-operative propagandist.

Holyoake, born in Birmingham, had been an Owenite and a follower of the early sociologist August Comte and in his newspaper the Reasoner developed the idea of secularism, before becoming a co-operative activist.  His story of the Pioneers became a great way of explaining co-operative principles and practices in a way that was easy to understand and to follow in ways that a dry textbook could never have achieved, and thousands followed the Pioneers example. Holyoake’s story telling was a tremendous boost to the spread of co-operation. 

Being in the UK predominantly a consumer movement co-operators have not been adverse to a bit of marketing and the use of every tool available to sell co-operation. When film first came on the scene they quickly took it up to spread the message. In the National Co-operative Film Archive there is a stunning collection of those early films but the art form really took off  in the 1930’s and 40’s with such gems as Co-operette (1937) starring Stanley Holloway to promote CWS products and films that also had important political messages like Peace Parade (1937) or Advance Democracy (1938). The Scottish CWS where not to be outdone and they made Out of the Box (1942) about the earliest documented co-operative society the Fenwick Weavers of 1769.

Probably the jewel in the collection is the film the Men of Rochdale made in 1944 at the then enormous cost of £15,000 to mark the Pioneers centenary. This is a beautifully crafted film with a script written by Reg Groves, who had written books about Conrad Noel and the Thaxted Movement, Victory Grayson and the Agricultural Workers Union. Probably most famous in Communist circles for being expelled from the Party in 1932 for being a leading light in the Trotskyite International Left Opposition. Groves work was based however almost exclusively on Holyoakes book.

The film has very high production values Sydney Box was the co-producer, Compton Bennett director and Reg Wyer was cinematographer. These three went on to work on the 1945 hit ‘The Seventh Veil’ with Sydney Box becoming head of production at Gainsborough Studios. The score was provided by John Greenwood who worked at Ealing Studios and was played by the London Symphony Orchestra (LSO) which had formed itself as a co-operative in the 1940’s.

The star of the production, easily recognised today, was John Laurie, familiar from all those Dads Army reruns. The film was easily the most popular co-op film they ever produced, seen in co-op halls up and down the country, it no doubt contributed to the spirit that swept Labour to power in 1945.

The new film is essentially a remake of the 1944 classic and is now being shown in cinemas around the country for Co-operative Group members to enjoy. It is directed by John Montegrande and Adam Lee Hamilton, whose last BYFA movie ‘Julius Caesar’ was nominated for an award at the prestigious Raindance Film Festival. The filmmaking process has been truly co-operative, with extras recruited from the local community to play supporting roles alongside professional actors, including John McArdle and John Henshaw.

The fact is that myth or reality the arguments the film presents are as relevant today as ever and this is a terrific piece of work which is credit to everyone involved in its production, just like the Men of Rochdale was all those years ago. This is a lasting legacy of the International year making the story of the Rochdale Pioneers accessible to a new generation and making the co-operative message anew in 2012 is important. So if you are a Co-operative Group member get along to one of the free screenings ahead of the film’s official premiere during the International Year of Co-operatives celebrations in Manchester. If you can’t make it be sure to watch out for its TV debut in November on Film4 as part of the channel’s British Connection Season.

To book your place or find a screening go to: www.co-operative.coop/2012/latest-news/conference-and-events/vipscreening/

Heart of England: Making a Song and Dance on our Birthday

2012 as well as being the UN Year of Co-operatives also has a special significance for my own Society. We can trace our roots back to nine ribbon weavers from Foleshill, now part of Coventry, who in 1832 formed the Lockhurst Lane Industrial Co-operative Society.

Well 180 years later and following a number of mergers we became in 2000, the Heart of England Co-operative Society, based in Nuneaton serving the communities of Coventry and Warwickshire, South Leicestershire and West Northamptonshire.

Today we are a well run profitable Society with trading figures that are the envy of many of our larger rivals with a broad portfolio from food to travel, non-food to funerals. Trading conditions are tough but we are quietly confident of the future. A long life and an illustrious past, even if that does mean being formed a good decade before the famous Rochdale Pioneers, however is no guarantee of success.

Co-operative Societies like any businesses have to keep renewing themselves and adapting making themselves relevant to the needs of their customers and members.

That drive and adaptation has since 2004 been lead by a remarkable man, Ali Kurji, the first and so far only ethnic minority leader of a major UK co-operative retail society. Ali’s story reflects well his ambition and drive and also ability of the co-operative movement to develop both his business skills alongside his desire to contribute to society.

Ali is quiet a character, on the surface an unassuming modest man but someone who is deeply determined, totally committed to doing the right thing with a very high level of personal integrity. Not characteristics you always find, it would seem, in some modern business leaders.

He was born in Kampala in Uganda and when he was just seventeen, left the family business to train in the UK as an accountant. Arriving in England in 1968 was a tremendous culture shock for a boy from Africa but soon things would get a great deal worse. Only four years after his arrival his family’s world in Uganda was turned upside down by the rise of Idi Amin.

His rule precipitated some very dark days indeed for the Asian business community in Uganda many fleeing the country with just what they could carry. For Ali there could be no going back. Having qualified as an accountant he worked for Manchester based, Appleby and Wood, who undertook audit work with co-operative retail societies.

Years later Ali was able to return to Uganda but only to sell up the family business donating the £35,000 proceeds to charity in India. For ten years he toured the country doing the audit sums for Co-ops large and small. This experience taught him that there was indeed a different way of doing business based on an ethical approach with a commitment to social justice. In 1982 he was offered a job as a management accountant with the old Coventry Co-operative Society a key part component of the Heart of England.

Since becoming CEO there is no doubt that today the Society reflects Ali’s personality, a tight control on costs and good business practice, continuous investment, alongside a strong commitment to the community. Unique in British retailing the Heart of England Board decided that they felt uncomfortable profiting from a product whose normal use killed those who used it. So over the last eleven years the society has donated the proceeds from the sales of cigarettes and tobacco products into a Helping Hearts fund to support local good causes, a fund that to date has dispersed some £636,000.

This year Ali has encouraged the Society to also adopt a corporate charity selected by staff. This year the Air Ambulance has been selected with positive effects and support form staff.

Ali however does not only support the societies charitable giving but he also carries out charitable work on his own behalf. One of the projects with which he is closely involved is supporting an orphanage in Iraq which sadly has currently plenty of work on its hands.

The Society has long standing commitments to an amateur orchestra and also to an amateur theatre operating from one of our old stores. However I have to say that for me the most pleasurable event that the Society has supported this year has been the Warwick Folk Festival. I feel the worlds of co-operation and folk music have a lot in common. After all being founded in 1832 means that a lot of folk music is contemporary for us!

The way folk festivals are organised and run has a terrific co-operative feel to it, people getting together with a common purpose not for personal gain but for the sheer pleasure of making a wonderful noise or having a good dance with all the proceeds being ploughed back into the making of bigger and a better festival.

Warwick this year was terrific, Eddie Reader was top of the bill, but there where many excellent acts and more importantly to be a true festival opportunities for people to participate in workshops for singing and dancing. John Plumb, Festival Chairman, said he was delighted with the support from the Society.

So after all these years the Society is in robust health and we are perfectly happy to be accused of making a song and dance of our 180^th birthday!

Trade Unions and Co-ops

There was an internet discussion recently begun by John Merrit MD of Social Enterprise link Wessex about the relationships between Trade Unions and Co-ops. He saw some of the key philosophical differences between trade unions and co-ops pointing out that there are strong syndicalist tendencies in co-ops and democratic centralist tendencies in trade unions, despite the fact that co-op members and workers are very often the same people. It is indeed a pity that with a shared criticism of share holder capitalism, co-operators and trade unionists cannot find ways of working together to create new models of democratic ownership.

This is very important. Despite the evidence of the complete failure of neo-liberalism it still has the ruling class and its acolytes in its thrall. Look at the debate about whether the blood sucking leech that has the franchise for the West Coast Mainline should have a beard or not. Despite all the evidence of colossal waste the Labour Party cannot bring itself to state the obvious - that privatisation has been an unmitigated disaster and the railways have to be bought back into some form of public ownership.

As a co-operator I of course believe that the precise form of public ownership should be open for discussion to ensure railway workers, rail-passengers and the government get a say in how then are managed and run. In my opinion there is no scope for private ownership of key utilities they are natural monopolies that as well as carrying out key economic activities also have a social function. Private businesses can often be reasonably well behaved but fundamentally in healthcare, education and the criminal justice system, the pursuit of profit is inappropriate it distorts the outputs and eventually increases the cost of these activities. I remember listening to Gordon Brown railing at the electricity companies about their pricing structures. It is clear that whatever regulatory system you create the companies will use all their efforts to subvert it.

It was even worse when we had those devastating summer floods with Tewkesbury threatened with complete submersion. Brown demanded that private companies should give up profits and dividends and invest more in flood prevention measures. You may as well tell a dog to be a cat. What nonsense these are private companies, if you do not want them to behave like private businesses don’t make them profit seeking in the first place.

This year Co-ops UK have signed a memorandum of understanding with the TUC we have a common interest I believe in protecting the co-operative brand from dilution and reputational damage from the creation of pseudo public service mutuals. But whilst we can easily agree that key services and utilities should be firmly in the public sector that still leaves an awful lot of the economy where there is a greater scope for co-operative ownership models.

The Post Office for example which consists of a large number of small private businesses, the provision of council services like waste collection and grounds maintenance seem ideal for co-operative business models and you don’t need to hear me going on again about a greater role for co-ops in the provision of financial services. In the United States the largest worker co-op is Co-operative Home Care Associates whose two thousand members are represented by branch 1199 of the Services Employees International Union (SEIU). Their slogan is the provision of quality care through quality jobs. Not a message that seems to strike a chord with many of the UK private social care vultures.

Here in the UK UNISON have signed an MOU with the Schools Co-operative Society which promotes Co-operative trust schools. The NASUWT have also signed an agreement with them to ensure schools remain not for profit and democratically accountable. There is no doubt the ground is moving, the masochism of the Conservative cuts will continue whilst they are in power, despite the whining of the Liberal Democrats and if Labour wins the election despite Ed Milibands rhetoric about good and bad businesses Labour has still not woken up to the reality that the old ways have failed and new ownership models are needed.

One recently lost comrade Ken Coates who was the driving force behind the Institute for Workers Control, saw through Tony Blair early on, the removal of the old clause four from the Labour constitution confirmed his fears. For Ken workers control came from his views on poverty and alienation and the fact that people where disempowered. He said it was “not simply about the worker taking all the decisions; it is about the environment being such that human development is the crucial datum and not profit and loss.”

Tory austerity is about destroying any hope of development for the working class, about breaking us so that we are grateful for whatever we are given, the process of alienation runs deep and it is up to us as trade unionists and co-operators to map out an alternative future. As the great Jimmy Reid said in his University rectoral address in 1971,

“Alienation, is the precise and correctly applied word for describing the major social problem in Britain today… it is the cry of men who feel themselves the victims of blind economic forces beyond their control. It is the frustration of ordinary people excluded from the process of decision making.”

It was true then and it is even truer today. More and more of us are the slaves of global capital and its lackeys prostituting ourselves in search of “investment”. Yet we have a choice - ownership really does matter - we can reverse this trend and find new ways of making capital work for people.

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.