ACCORD Newsletter No. 2 - December 2001

Welcome to the Second edition of ACCORD NEWS. The newsletter, published electronically every six weeks by the Australian Centre for Co-operative Research and Development, features highlights and relevant information about our work and aims to stimulate intellectual debate on the future of co-operatives and mutual organisations. It includes articles and information of interest to organisations and individuals involved in co-operatives, social enterprise, local economic and community development, and rural regeneration. We hope that you enjoy reading our Christmas edition and we look forward to your continued support in the new year.

An ACCORD study to examine public policy affecting co-operatives over the past twenty years is nearing completion. In this extensive study, Garry Cronan, Senior Research Fellow/Executive Officer examines the broad public policy settings that have affected co-operatives and their development, changes in co-operative legislation and institutional structures within the co-operative movement.

Initial research indicates that co-operative development has been undertaken without due regard for the co-operative principles of self-help and mutuality. Co-operative activity has been seen in some quarters as being in conflict with the broader and dominant economic policies that have been adopted at the State and Federal level. Accordingly, policy on co-operatives has not provided the necessary environment which is conducive to co-operative development and which maximises the advantages of co-operative structures.

The report asserts that the problem has been exacerbated by the weak institutional framework of the co-operative sector and the failure of the sector to develop co-operatives within a market driven economy. Broader societal and marketplace trends such as the rise of individualism, which has led to the nature of membership changing from that of a member to investors and citizens into consumers, have also been significant contributory factors.

The report highlights the fact that competition policy has failed to take account of the philosophical aspects of membership within a co-operative. That is, that members are the owners of the co-operative and therefore subordinate their personal rights for the collective benefit. As co-operatives are collusive in nature, an important factor in the commercial operation of co-operatives is the extent to which competition policies impact on member dealings and the provision of exclusive services to members. One of the key objectives of competition policy has been to classify members as potential competitors amongst one another. This is inconsistent with the principles of co-operation and with co-operative values. The report raises the issue, as to whether the law requires modification to recognise that people have the right to come together for mutual benefit.

The NSW Co-operatives Act 1992 has been amended to prescribe the new requirements relating to the content and currency of disclosure statements issued by trading co-operatives to potential members.

The new amendments require the board of a trading co-operative to issue a 'current disclosure statement' to potential members before issuing or transferring shares to them. Breaches of the new provisions may render the Board and any person associated with the issue or transfer of shares guilty of an offence and liable to claims for compensation.

In the New South Wales Supreme Court decision of Re NRMA Ltd and NRMA Insurance Ltd, the court was required to consider the effect of the principles of mutuality on the demutualisation of a mutual insurance company through a scheme of arrangement.

In essence, the case held that mutuality principles are not recognised under current company legislation. To be enforceable, these principles had to be included in a company's constitution as there was no legal obligation on the board of a mutual company to conduct the operations of the company along mutual lines. This decision raises questions about whether there should be separate legislation for the incorporation of mutual organisations.

In a detailed examination of the implications of the decision, Peter Boland of ACCORD asks whether mutual associations should provide goods or services to non-members and whether specific or discrete legislation should be enacted to regulate the demutualisation of mutual associations.

Maari Ma Health and ACCORD have won a grant from ATSIC to develop and document structures for communities in the Murdi Paaki region. The project includes a skill-building component that will empower the Community Working Parties for the future.

Walgett Special 1 Co-operative Ltd is a grain co-operative registered under the Co-operatives Act 1992 (NSW). It has been a successful co-operative, which has doubled its grain handling capacity in 3 years. In its first year of operation, it demonstrated that co-operation in marketing resulted in higher farm-gate prices. It achieved $ 30 per tonne higher than the market price.

One of the co-operative's key strategies has been to add value to membership by taking advantage of available business opportunities. This had led to the co-operative increasing its membership to 500 farmers and boosting the employment opportunities in the area. It recently issued Co-operative Capital Units (CCU) in an effort to expand its capital base. The Co-operative is currently trying to extend its services to Walgett towns-people, in particular, employment for indigenous people.

Laughing all the Way to the Credit Union - The CreditCare Experience in No-Bank-Towns, a report by Dr Gary Lewis was launched on 3 December 2001, at a special seminar hosted by ACCORD at the University of Technology, Sydney.

ACCORD commissioned the report to evaluate the CreditCare program, which ran from 1996-2000 and was introduced and managed by the Credit Union Foundation of Australia. CreditCare was a joint initiative of the Federal Government and the Credit Union Corporation.

Highlights of the seminar were two thought provoking and challenging presentations given by Margaret Lester, former CreditCare Field Officer, and Natalie Armstrong, President of the Delegate Progress Association. Margaret spoke with great conviction about her involvement, and the involvement of other field officers in developing strategies for re-establishing banking services in regional Australia.

Natalie provided a rare glimpse into current bank policies and practices and how they impact on local businesses and regional communities. Speaking from her own personal experience, she gave delegates an insight into the social consequences of banking deregulation at a regional level. She told of the frustration and despair experienced by rural communities as they endeavoured to come to grips with the loss of service industries resulting from the closure of local banks. Natalie said that, "in one instance, locals were forced to make a 75 kilometre round trip just to obtain banking services". She indicated that as a consequence of this, local custom was lost, as people tended to shop where banking services could be obtained.

The CreditCare experience has been described as one of the most successful examples of a co-operative approach to community economic development. You can download a copy of the report in PDF format from our publications section.

The Association to Resource Co-operative Housing (ARCH) co-ordinated a mini-conference, Co-ops at the Crossroad, to discuss future strategies for co-operative housing in NSW. Over 45 people attended the conference, representing the vast majority of housing co-operatives in the NSW program, as well as representatives from other housing bodies. Dr Jo Barraket of ACCORD describes the conference as a spirited afternoon, filled with energy and optimism for the future of co-operative housing in NSW.

Maleny, situated in the hinterland of Queensland's Sunshine Coast, 100 km north of Brisbane will host the next Community Capital Conference from 11-12 April 2002.

The Conference will explore the promotion of socially, environmentally and economically sustainable communities through local control of assets, income and resources.

Conference organisers are calling for expressions of interest in presenting a paper, or facilitating a workshop at the conference. Details and a proforma are available on ACCORD's website at: click here .

Earlier this month, Lynne Toupin, CEO of the Canadian Co-operative Association, on behalf of the Canadian voluntary sector, signed the recent landmark Accord between the Government of Canada and the Voluntary sector. Although the cooperative movement in Canada retains a certain distance between itself and the voluntary sector, it participated in the process of discussions between the Canadian government and the voluntary sector that have led to the signing of the Accord. Lynne was co-chair of the Joint Table that negotiated the Accord.

National Co-operative Business Association (NCBA)of USA and its partners, Poptel of the United Kingdom and the International Cooperative Alliance (ICA), Geneva, Switzerland have announced that they will launch the new dedicated top-level Internet domain .coop for co-operatives on January 30, 2002.

ACCORD and its Staff would like to thank all our stakeholders and contributors for your continued support and interest over the past year and look forward to hearing from you again in the new year. We wish you all a very merry Christmas and a Happy New Year.

We would welcome your comments on our newsletter and any suggested topics or items for inclusion in the next issue due for publication on 12 February 2002. If you have any items of interest please ensure that these are forwarded to us by 5 February 2002.
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