Professor Akira Kurimoto, Chair ICA-AP Research Committee and Member ICA Committee for Cooperative Research

Need for Cooperative Identity

We witness the growing inequality, political and social divides, while we are threatened by the consequences of climate change and rampant pandemics. We could not succeed in overcoming these challenges when we desperately needed the cooperation and solidarity among people. In such a difficult time, we have to address these global issues relying on our basics, Cooperative Identity, crystalized in the ICA Statement on Cooperative Identity. The ICA Statement was agreed as the greatest common factor of Cooperative Identity among cooperators worldwide in 1995. It was then included in the UN Cooperative Guidelines (2001) and the ILO Recommendation 193 on Promotion of Cooperatives as a part of the international public law. It contains the definition of a cooperative, its values and principles that are universal. The Guidance Notes of Cooperative Principles were published in 2015 to help understand and practice the cooperative principles.

Characteristics of the Asia-Pacific Cooperatives

Asia-Pacific region has a vast diversity of the political-legal system, economic system, level of development, culture, and religion. The political system is mostly based on the development states that prioritize socio-economic catch-up to the advanced West. The legal system is the common law in newly independent countries and Oceania, while the statute law is dominant in East-Asian countries. The economic system is based on a market economy with a varying degree of state intervention while the region includes the richest and least developed countries. The ethnocentric culture and nationalism often fuel conflicts among nations while religions also create persistent conflicts. Such diversity makes regional political and economic integration very difficult.

The cooperatives in Asia and Pacific operate under such circumstances. Asian cooperatives are characterized by the dominant state roles in regulation and promotion while Pacific cooperatives face strong competition with the for-profit sector. The British Empire introduced the Cooperative Credit Societies Act of India with strong government control in 1904, that became a prototype of cooperative legislation in most of the colonized countries. Even after the independence, such top-down tradition was inherited since national leaders had seen cooperatives as an engine of national development. The ICA in Asia and Pacific has convened the biennial cooperative minister’s conference since 1990 that aims to strengthen cooperative autonomy and independence based on constructive partnership, but the progress has been very slow. In most of the countries, cooperative ministers or registrars have dominant roles in regulating cooperatives. Even Japan has a strong bureaucracy system that controls cooperatives to promote specific industrial policies (e.g., agriculture, banking etc.).

Deepening Cooperative Identity from the Asia-Pacific Perspective

The ICA 33rd World Cooperative Congress will be held in Seoul, South Korea, in December 2021 with the main theme “Deepening Cooperative Identity”. This is the second occasion following the ICA Tokyo Congress in 1992 that discussed basic cooperative values. Seoul Congress is a good opportunity to reflect on the Cooperative Identity after 26 years since its adoption and renew our commitment to deepen it. The International Cooperative Research Conference and the Cooperative Law Forum will be held as pre-events discussing the same.

As far as the definition and values are concerned, there have been very few discussions. A Korean researcher proposed to combine the “Asian values” with universal values in the Research Conference held in conjunction with the Tokyo Congress, emphasizing collective orientation as against Western individualism but could not give an impact. The concept was advocated by Mahathir Mohamad (Prime Minister of Malaysia) and by Lee Kuan Yew (Prime Minister of Singapore) as a political ideology of the 1990s, which defined elements of society, culture, and history common to the nations of Southeast and East Asia, aiming to use commonalities – for example, the principle of collectivism – to unify people for their economic and social good and to create a pan-Asian identity as contrasted with perceived European ideals of the universal human rights. However, the popularity of the concept waned after the 1997 Asian financial crisis.

The 1st Principle: Voluntary and Open Membership addresses no discrimination. In the Asian context, the participation of women and youth is the most relevant issue since male and senior leaders are prevalent in cooperatives, reflecting on the culture embedded in the public and domestic spheres. The legal tradition of land ownership that is confined to men in farmers’ coops may be a factor influencing the composition of membership and leadership. There are cooperatives exclusively composed of women in India, Iran, Malaysia, etc. to avoid gender discrimination while women occupy most of the membership and boards in consumer coops in Japan and South Korea. The youth is also underrepresented group, the lack of youth participation and young leaders may endanger the sustainability of cooperatives.

The 2nd Principle: Democratic Control is concerned with the internal governance of a cooperative.  Recently, we witnessed the failure of governance leading to the serious setback of the Cooperative Group in the UK and the bankruptcy of Fagor domestic electric company, a flagship workers’ cooperative of the Mondragon group in Spain. The ICA’s Guidance Notes to the Cooperative Principles exhibit guidelines for a wide range of governance issues. In response to scandals including manipulated account and appropriation of cooperative property by chief executives in the mid-90s, the JCCU published the guidelines for sound governance in 1999 covering various aspects of top management, boards, auditors, general meetings, and disclosure of information.

The 3rd Principle: Member Economic Participation deals with members’ obligation in strengthening the capital of their cooperative. A cooperative has inherent difficulty in raising capital because of limited return on investment and equal voting right. Therefore, alternative ways of raising capital were developed and demutualisation took place in the Western countries. Some cooperatives in Australia and New Zealand followed this way but it seems that demutualisation is not so popular in most of the Asian countries. In Japan, agricultural cooperatives run the world-class banks, but a huge amount of farmers’ deposit is not effectively utilized, while the consumer cooperatives build up members’ share through monthly instalments since they are not allowed to operate credit business.

The 4th Principle: Autonomy and Independence is a principle newly added in 1995. It is especially relevant to the Asian cooperatives since they are still by and large under the strong control of the state bureaucracy. To establish a constructive partnership based on equality, both states and cooperatives need to change their attitude. The former has to confine itself to legal supervision in accordance to the UN/ ILO guidelines and the resolutions of the ICA ministerial conferences while the latter has to build capacities in strategic planning and coordination to be more independent in policymaking in the members’ interests.

The 5th Principle: Education, Training and Information is a principle enlisted since the time of Rochdale Pioneers. Member education is essential for the success of cooperatives while the manager and employee training are conducted at primary, secondary, and national levels. The school and university cooperatives in many Asian countries are conducive to the cooperative development in the long run. In the information age, the importance of public relations is increasingly recognized but cooperatives tend to lag in utilizing state-of-art digital devices.

The 6th Principle: Cooperation Among Cooperatives is a principle added in 1966 and its importance is ever increasing in the time of mega competition. Cooperatives of the same kind are naturally federated at the regional and national level while the collaboration among different kind of cooperatives needs to be facilitated. In Japan, the direct transaction between consumers and producers (Sanchoku) has been promoted by consumer and farmer/ fishery cooperatives to enhance mutual understanding and realize mutual benefits since the 1970s; while the Japan Cooperative Alliance (JCA) was set up as a thinktank covering all types of cooperatives in 2018. In the Asia and Pacific region, the ICA-AP Regional Office is expected to strengthen the collaboration among national cooperatives while the ASEAN Cooperative Organization (ACO) needs to create tangible benefits in the sub-regional cooperation.

The 7th Principle: Concern for Community is a new principle added in 1995. This is related to cooperatives’ community engagement through policies approved by members. It is noteworthy that this principle presented a notion of sustainable development 20 years ahead of the SDGs. In the Asia and Pacific region, prone to natural disasters caused by earthquakes, tsunami, and typhoons/ cyclones, that frequently brought formidable human and monetary losses, we can note the cooperative responses to such calamities in both rescue and rehabilitation phases. We observed cooperative endeavors to rehabilitate victims’ life in Indonesia, India, Sri Lanka and so on after the Indian Ocean Earthquake/ Tsunami in 2004. After the Kobe Earthquake in 1995 and the East Japan Earthquake/ Tsunami in 2011, the Japanese cooperatives made tremendous efforts to rescue victims and helped them to rehabilitate lives. Additionally, cooperatives succeeded in enacting the Act to Help Victims to Rehabilitate Lives in 1998.

There exist many best practices of implementing cooperative values and principles that are not necessarily known widely, but some of them are analyzed in the case studies in the volume “Waking the Asian Pacific Cooperative Potential” published in 2020. We need to document these cases to draw lessons and do better in meeting challenges through deepening Cooperative Identity in the future.

Views expressed by the author are personal.