1. CO-OPERATIVES POLICY AND BILL
Mr Lionel October
Deputy Director-General
Enterprise and Industry Development
13 October 2004

2. TABLE OF CONTENTS Problem statement The Co-operatives Policy
The Co-operatives Bill
Policy instruments to support objectives
Some of the key deliverables in progress

3. PROBLEM STATEMENT
Co-operative development and promotion has for a long time focused in the agricultural sector
Development progressed rapidly due to the 1981 Co-operatives Act support and government subsidies
The support enjoyed resulted in the development of a large commercial agricultural co-operative sector

4. PROBLEM STATEMENT
Co-existence of a dual co-operative sector with highly developed white-owned co-operatives and weak black-owned co-operatives
The 1981 Co-operatives Act still caters for registration of Agricultural co-operatives
Agricultural sector still provided with formal support and other incentives
Emerging, majority blacks lacks formal support, operate outside of the Act

5. PROBLEM STATEMENT Review 1981 Co-operatives Act due to a need to:
Provide an enabling environment for all co-operative enterprises in all sectors of the economy to flourish
Diversify growth of all enterprise types to contribute to economic growth
Provide simpler registration processes
Ensure accessibility to the grassroots through decentralization of registration

6. PROBLEM STATEMENT
Co-operatives as effective vehicles for broad-based empowerment
Emerging black cooperative enterprises compete successfully on a national and global scale

7. THE NEW CO-OPERATIVES POLICY
New policy outlines government’s broad guideline to develop and support co-operatives
Outlines the government’s approach to defining the co-operative enterprises as well as the policy instruments that will be utilized to achieve the objectives
Policy statement deals with an important variant of economic enterprise, namely co-operatives

8. THE NEW CO-OPERATIVES POLICY
Promotes the development of economic enterprises and diversifies the ownership, size and geographic location of those enterprises
A self-sustaining co-operative movement that can play a major role in the economic, social and cultural development of South Africa
Policy statement should be read in conjunction with those on Small, Medium and Micro-enterprises and the Strategy on Broad Based Black Economic Empowerment

9. CONSULTATIVE PROCESS
Policy document resulted through an intense consultation process, initiated in 1997 with the establishment of a Co-operative Policy Task Team
The Policy Task Team consisted of the main stakeholders in South Africa’s co-operative movement at the time
Nine regional workshops and one national co-operative conference was organized to discuss main policy issues

10. CONSULTATIVE PROCESS
Cabinet recommended to move the function to the dti
A National Co-operatives Workshop was held last year March for input from all stakeholders
Consultation continued at NEDLAC to discuss both policy and Bill
Report will be adopted by Co-operatives Task Team and taken through other relevant structures

11. Policy Objectives and Purpose
Create an enabling environment for co-operative enterprises which reduces the disparities between urban and rural businesses, and is conducive to entrepreneurship
Encourage persons and groups who subscribe to values of self-reliance and self-help to formalise
Enable such co-operative enterprises to register and acquire a legal status/legal persona separate from their members
Promote greater participation by black persons, especially those in rural areas, women, persons with disability and youth in the formation and management of co-operatives
Establish a legislative framework that will preserve the co-operative as a distinct legal entity

12. DEFINITIONS, VALUES AND CORE PRINCIPLES OF CO-OPERATION
Policy provides definitions of:
Primary
Secondary
Tertiary
For purposes of registration their functions are different
A (primary) co-operative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise

13. OTHER KINDS OF CO-OPERATIVES
Other kinds and types of co-operatives include:
housing co-operative
workers’ co-operative
social co-operative
agricultural co-operative
financial services co-operative
consumer co-operative
 marketing and supply co-operative
transport co-operatives/ services

14. CHARACTERISTICS
Two characteristics distinguish co-operatives from other types of enterprises:    they are associations of people who agree to be the owners, the makers of democratic decisions and users of their joint enterprise their main purpose as an economic unit is to promote their members by rendering services, rather than to maximize profits

15. SCOPE OF POLICY FOR SUPPORT PURPOSES
Applies to established co-operatives but the emphasis is on supporting emerging co-operative enterprises:
Emerging co-operatives:
These co-operatives have been identified as struggling for survival and lacking training, skills, markets.
Established co-operatives:
These are co-operatives that are mainly operating in agriculture and controlled by the white minority, although they do exist even in other sectors.

16. THE CO-OPERATIVES BILL
Core principles of co-operation:
Voluntary and open membership
Democratic member control
Member economic participation
Autonomy and independence
Education, training and information
Co-operation among co-operatives
Concern for community

17. POLICY INSTRUMENTS TO SUPPORT CO-OPERATIVE ENTERPRISES
Legislation
Establishing a Co-operatives Development Fund for technical assistance and capacity building.
Special incentives and support measures for Co-operatives enterprises (the dti)
NEF designed a special product for co-operatives

18. POLICY INSTRUMENTS TO SUPPORT CO-OPERATIVE ENTERPRISES
Alignment by all COTTI programmes and other dti programmes to support co-operatives
New Small Enterprise Development Agency
APEX FUND
Partnerships

19. POLICY INSTRUMENTS TO SUPPORT CO-OPERATIVE ENTERPRISES
Availing access to infrastructure through incubation programmes
Acess to SMME tax incentives as businesses
Preferential procurement
Institutional support and the Co-operative Advisory Board

20. FUNCTIONS OF THE CO-OPERATIVES ADVISORY BOARD
The functions of the Advisory Board are to advise the Minister generally, and to make recommendations, with regard to –
(a)           co-operative development policy in the Republic;
(b)         the application of any of the provisions of this Act or any other law on matters affecting co-operatives;
(c)           the publication of any regulations in terms of this Act that may be necessary or desirable;
(d)      the provision of support programmes targeting co-operatives that create employment, benefit disadvantaged groups or lead to greater participation in the economy by women and black people;

21. FUNCTIONS OF THE CO-OPERATIVES ADVISORY BOARD
(e)         the establishment of guidelines for co-operative audits;
(f)     any matter referred to the Advisory Board that relates to promoting the development of co-operatives; and
(g)       any decision the Minister is required to take in terms of this Act, on the request of the Minister.

22. THE CO-OPERATIVES BILL 2004
To provide for the formation and registration of co-operatives, the establishment of a Co-operatives Advisory Board, the winding up of co-operatives and to provide for matters connected therewith
The dti as the central department
Registrar to move to CIPRO
Establishment of a Unit in the dti/role of the dti
Accommodate other co-operatives kinds and type provisions
Onerous sections removed

23. SOME KEY DELIVERABLES IN PROGRESS
Strategy consultations – nationally and provincially finalised and incorporated into the draft strategy
Study tours to Italy, Kenya, Japan and Spain – being finalised to incorporate best-practice into the strategy
Strategy to be tabled at EXBO early November 2004
National Co-operatives Conference to be held on 12 and 13 November 2004

24. THANK YOU