The International Labour Organization, a specialized agency of the United Nations, was
established in 1919 to promote social justice and internationally recognized human and
labour rights. Recognizing the importance of cooperatives to millions of people around the
world, the ILO has been actively
engaged in supporting cooperative
development since the establishment of
a cooperative technical service in 1920,
deriving its mandate from the ILO's
Constitution which provides for
consultations with recognized
non-governmental international
organizations including those of
agriculturists and cooperators. It is
interesting to note that the first ILO
Director-General, Mr. Albert Thomas,
was a member of the Executive
Committee of the International
Co-operative Alliance, which as the
global voice of the cooperative
movement, maintains a consultative
status with the ILO.
The ILO, then and now, has viewed cooperatives as important tools for improving the living
and working conditions of both women and men. The ILO sees cooperatives as businesses
that are based on a broad set of democratic and egalitarian values. Since cooperatives are
owned by the users of the services they provide, they make decisions that balance the
need for profitability with the welfare of their members and the community which they
serve. As cooperatives foster economies of scope and scale, they increase the bargaining
power of their members providing them, among others benefits, higher income and social
protection. Hence, cooperatives accord members opportunity, protection and
empowerment - essential elements in uplifting them from degradation and poverty. The
ILO has thus always supported the development of cooperatives as important vehicles in
meeting its goals.
Through the Cooperative Branch the ILO provides a variety of services to ILO
constituents, by means of policy advice to member States, technical cooperation,
documentation and information to increase public awareness about cooperatives, and the
promotion of cooperative methods and approaches to resolve a variety of problems and
issues. Technical cooperation activities cover a wide range of themes, including
cooperative reform and legislation, human resource development and networking, job
creation, poverty alleviation, and local economic development. The ILO has the largest
technical cooperation programme on cooperatives within the UN system.
With the ILO's recent consolidation of its focus on Decent Work or the "promotion of
opportunities for women and men to obtain decent and productive work, in conditions of
freedom, equity, security and human dignity", the Cooperative Branch has placed greater
emphasis on the employment creation activities of cooperatives and their capacity to
provide social protection, especially to the marginalized sectors of society. The
organizational flexibility of cooperatives to reach out to the informal economy provides
a good opportunity to improve the conditions of work in this otherwise unprotected sector.
It is noteworthy that the very values and principles on which cooperatives are based -
self-help, self-responsibility, democracy, equality, equity, solidarity, social responsibility
and caring for others - find congruence with the notion of Decent Work.
ILO Recommendation on cooperatives
The ILO promotes universally recognized human and labour rights primarily through its
standard-setting functions. Its highest decision-making body, the International Labour
Conference (ILC) debates and adopts standards on labour rights, employment, human
resource development and other ILO concerns including, for example, small and medium
enterprise and cooperative development. A labour standard can be in the form of a
Convention or a Recommendation. An ILO Convention, once ratified by a member State,
becomes binding for that country and compliance becomes mandatory. A Recommendation,
as the name implies, serves as a policy guide for member States and compliance is not an
obligation. In practice, however, many member States adopt the provisions of ILO
Recommendations and frequently incorporate important provisions in their national laws.
Cooperatives are directly or indirectly referred to in various ILO Conventions and
Recommendations but only one Recommendation focuses solely on cooperatives. This is the
new Recommendation No. 193 on the Promotion of Cooperatives adopted at the 90th
Session of the ILC in June 2002. This Recommendation replaces the Cooperatives
(Developing Countries) Recommendation of 1966 (No. 127).
Reasons for adopting a new Recommendation and some remarks on the process
Since the time of the adoption of Recommendation No. 127, political, economic and social
changes have affected the situation of cooperatives throughout the world. As a result,
in March 1999, the ILO's Governing Body decided that a new universal standard could help
enable cooperatives to develop more fully their self-help potential, placing them in a
better position to meet current socio-economic problems such as unemployment and social
exclusion, and help them compete in a global market place. At about the same time, the
United Nations began debating new guidelines on cooperatives, which were adopted by the
General Assembly on 19 December 2001. The ILO Governing Body's decision to revise
Recommendation No. 127 was based on the following main reasons:
The focus of Recommendation No. 127 was limited to developing countries while
new roles for cooperatives in both the industrialized and the former communist
countries had emerged in the last thirty years;
Recommendation No. 127 mirrored the development concerns of the 1960's where
cooperatives were seen primarily as tools in the hands of the government. The
Recommendation thus overemphasized the role of the government in cooperative
development and underestimated the autonomous character of cooperatives. In
accordance with the reformulated universally recognized cooperative principles,
the Governing Body considered that cooperatives should be regarded primarily as
a means for their members to achieve their common economic and social goals.
Their autonomy as a form of a private enterprise guided by ethics and principles
should be upheld;
In many countries, political, economic and social changes have put pressure on
government to limit its involvement in economic and social affairs. The State's role
is increasingly limited to that of providing the political, legal and administrative
framework for the development of private organizations including cooperatives.
Recommendation No. 127 had yet to take account of these developments.
In industrialized countries, new forms of cooperatives and new cooperative
enterprise structures had emerged to take advantage of the challenges and
opportunities opened up by globalization and technological changes. Heightened
competition from other forms of business enterprises had also necessitated these
changes. These facts required recognition in a new ILO standard on cooperatives;
In common with most other ILO standards, Recommendation No. 193 was adopted as a
result of two major discussions at the ILC. The first discussion took place in June 2001
at the 89th Session of the ILC which deliberated the "Proposed Conclusions" or the
provisions proposed to be incorporated in the new instrument. These "Proposed
Conclusions" were formulated on the basis of responses to a questionnaire circulated to
ILO member States in January 2000. The 89th ILC adopted "Conclusions" which in turn
were utilized by the International Labour Office as the basis for a proposed draft of the
new Recommendation. The proposed text was circulated to member States in August 2001
and their responses were collated and incorporated in a new text which was the subject
of a second and final deliberation at the 90th ILC in June 2002. This discussion paved the
way for the adoption of a new ILO Recommendation on the Promotion of Cooperatives -
Recommendation No. 193.
The main features of Recommendation No. 193
The main features of Recommendation No. 193 are as follows and will be discussed in
detail below:
Recognition of importance of cooperatives in economic and social development
Reaffirmation of the cooperative identity
Equal treatment for cooperatives
Definition of the government's role in creating a supportive policy and legal
framework, and in facilitating access to support services and finance
An active promotional role for employers', workers' and cooperative
organizations
Encouragement of international cooperation
The importance of cooperatives in economic and social development
In a number of ways the text confirms the important role that cooperatives play in global
and national economic and social development. Cooperatives are specifically seen as
significant tools for the creation of decent jobs and for the mobilization of resources for
income generation. With regard to economic and social development, cooperatives promote
the "fullest participation of all people" (Preamble) and facilitate a more equitable
distribution of the benefits of globalization. They contribute to sustainable human
development and have an important role to play in combatting social exclusion. The text
further states that "the promotion of cooperatives…..should be considered as one of the
pillars of national and international economic and social development" (paragraph 7(1)).
Reaffirmation of the cooperative identity
In order to fulfill these roles cooperatives should be true to their identity, their
principles and their values. The definition of a cooperative that appears in the Statement
on the Cooperative Identity, adopted by the General Assembly of the International
Cooperative Alliance in 1995, is incorporated in the text of the Recommendation, ensuring
that there is only one, universally acceptable definition of a cooperative. The cooperative
values, ethics and principles are cited
and the full text of the principles
appears as an Annex to the
Recommendation. National policy and
legal frameworks are to be guided by
the cooperative values and principles,
including most significantly, to
protect and foster the autonomy of
cooperatives.
Equal treatment
The International Labour Conference
discussions in 2001 and 2002
generated a great deal of debate
regarding the treatment of
cooperatives vis-à-vis other types of
enterprises and social organization.
On the one hand, it was seen as
important for cooperatives to "stand
on their own two feet" and function
as independent and autonomous
enterprises in a competitive market
situation, but on the other hand to
be supported if they meet specific
social and public policy outcomes. All
cooperatives have social purposes but
it was thought that cooperatives that
have specifically social aims,
particularly in favour of
disadvantaged groups in society,
could benefit from special measures.
In addition, it was considered very
important to stress the need to avoid
discrimination against cooperatives
because of their special character.
Thus, the text states that
"Cooperatives should be treated in
accordance with national law and
practice and on terms no less
favourable than those accorded to
other forms of enterprise and social
organization" (paragraph 7(2)).
The role of government in cooperative promotion
The Recommendation places heavy emphasis on the role of government in establishing an
appropriate policy framework within which cooperatives can survive and grow. As has been
mentioned before, government actions are to be guided by cooperative values and
principles. Specifically, they are expected to provide a supportive policy, legal and
institutional framework, provide support measures when social and policy outcomes are
met (i.e. support to cooperatives based on their activities and not because of their
nature), provide oversight on terms equivalent to other forms of enterprise and social
organization, adopt measures to improve access to finance for disadvantaged groups, and
topically, to promote the formalization of the informal economy. The role of cooperatives
in transforming marginal survival activities in the informal economy into legally protected
work is recognized.
It is also recognized that government can contribute significantly to improving cooperative
performance by facilitating access of cooperatives to support services. In particular,
support to cooperative human resource development is considered to be key. Cooperative
success can often be attributed to the success of comprehensive HRD programmes for
all stakeholders in cooperatives - members, workers and managers - and this is reflected
in a number of places in the text of the new Recommendation. Measures should be
adopted to develop the capacities and knowledge of the values, advantages and benefits
of the cooperative movement, and national policies should develop technical and vocational
skills, entrepreneurial and managerial abilities, knowledge of business potential and general
economic and social policy skills of cooperative members, workers and managers and
improve their access to information and communication technologies. The promotion of
education and training in cooperative principles and practices at all appropriate levels of
the national education and training systems, and indeed throughout society, is further
encouraged.
The text also makes reference to government's role in promoting safety and health,
productivity and competitiveness in cooperatives, facilitating access to credit, markets
and information, promoting best practice in corporate governance, strengthening gender
equality, promoting workers' rights and facilitating vertical and horizontal linkages among
cooperatives. On the issue of workers' rights there is a topical reference to the need to
combat "pseudo cooperatives" through the application of labour legislation, and a call to
promote best labour practices in cooperatives. The Preamble makes special reference to
the ILO Declaration on Fundamental Principles and Rights at Work (1998) and a number
of international labour standards.
Governments are urged to consult cooperative, employers' and workers' organizations in
the formulation and revision of legislation, policies and regulations applicable to
cooperatives. Governments are also encouraged to facilitate the promotion of the
cooperative movement.
The role of employers', workers' and cooperative organizations
An active role in cooperative promotion is envisaged for employers', workers' and
cooperative organizations, both individually and collectively. Employers' organizations are
asked to consider extending membership and the provision of services to cooperatives
wishing to join them. Workers' organizations are encouraged to assist cooperative
employees to join trade unions,
assist trade union members to
establish cooperatives, participate
in fora having an impact on
cooperatives, participate in setting
up cooperatives to create or
maintain employment, promote
productivity, equality of
opportunity and rights of
worker-members and undertake
education and training. The
reference to the special status of
worker-members is of particular
significance. Cooperative
organizations are encouraged to
promote an active relationship with
the social partners to create a
favourable climate for cooperative
development, provide technical
support services and commercial
and financial services, invest in
human resource development and
represent cooperatives at the
international level. In sum, the
social partners and cooperative
organizations are seen as critical
agents in the task of cooperative
promotion.
International cooperation
The text calls for greater
international cooperation in
information exchange on best
practices particularly regarding
employment creation and income
generation, legislation, training
methods and techniques, technology and product standards, and strengthening of linkages
between national and international institutions involved in cooperative development. It also
suggests exploring the possibilities of developing common regional guidelines and
legislation on cooperatives.
Towards the future
The new ILO Recommendation No. 193 on the Promotion of Cooperatives will, we hope, be
of great service to the cooperative movement and to the ILO's global tripartite
constituency. We in the ILO's Cooperative Branch look forward to working closely with our
partners to promote the new instrument. Already a number of ILO member States are
considering revising their laws and national policies to take account of the provisions of
Recommendation No. 193. The Cooperative Branch is now in the process of planning a
follow-up campaign to promote the new Recommendation, including workshops and seminars
on the national and regional levels, easy-to-read publications and tailor-made activities for
ILO constituents. It is hoped that funds will soon be identified for a new technical
cooperation project to assist member States to implement the Recommendation.
In conclusion, we believe that the cooperative methodology provides a proven response to
many of the world's current economic and social problems and challenges, not least in the
fight against poverty and social exclusion. The ILO believes that Recommendation No. 193
will serve as a useful tool in the struggle to promote Decent Work through cooperatives.
"Cooperatives empower people by enabling even the poorest
segments of the population to participate in economic
progress; they create job opportunities for those who have
skills but little or no capital; and they provide protection by
organizing mutual help in communities"
The International Labour Organization, a specialized agency of the United Nations, was
established in 1919 to promote social justice and internationally recognized human and
labour rights. Recognizing the importance of cooperatives to millions of people around the
world, the ILO has been actively
engaged in supporting cooperative
development since the establishment of
a cooperative technical service in 1920,
deriving its mandate from the ILO's
Constitution which provides for
consultations with recognized
non-governmental international
organizations including those of
agriculturists and cooperators. It is
interesting to note that the first ILO
Director-General, Mr. Albert Thomas,
was a member of the Executive
Committee of the International
Co-operative Alliance, which as the
global voice of the cooperative
movement, maintains a consultative
status with the ILO. 
In industrialized countries, new forms of cooperatives and new cooperative
enterprise structures had emerged to take advantage of the challenges and
opportunities opened up by globalization and technological changes. Heightened
competition from other forms of business enterprises had also necessitated these
changes. These facts required recognition in a new ILO standard on cooperatives;
values, ethics and principles are cited
and the full text of the principles
appears as an Annex to the
Recommendation. National policy and
legal frameworks are to be guided by
the cooperative values and principles,
including most significantly, to
protect and foster the autonomy of
cooperatives. 
An active role in cooperative promotion is envisaged for employers', workers' and
cooperative organizations, both individually and collectively. Employers' organizations are
asked to consider extending membership and the provision of services to cooperatives
wishing to join them. Workers' organizations are encouraged to assist cooperative
employees to join trade unions,
assist trade union members to
establish cooperatives, participate
in fora having an impact on
cooperatives, participate in setting
up cooperatives to create or
maintain employment, promote
productivity, equality of
opportunity and rights of
worker-members and undertake
education and training. The
reference to the special status of
worker-members is of particular
significance. Cooperative
organizations are encouraged to
promote an active relationship with
the social partners to create a
favourable climate for cooperative
development, provide technical
support services and commercial
and financial services, invest in
human resource development and
represent cooperatives at the
international level. In sum, the
social partners and cooperative
organizations are seen as critical
agents in the task of cooperative
promotion.