The Gazette 1989

A pril 1989

GAZETTE

New laws for co-ops?

Act, 1978, included some law reform e.g. re wi nd i ng - up of societies under the Companies Acts. The 1978 Act, however, was mainly aimed at deposit-taking societies such as PMPS rather than f ac i l i t a t i ng the co-operative movement. Long delay in introducing a code of laws specifically for co-ops has compounded the task of law reform. The Minister for Industry and Commerce will presumably meet co-op interest groups to discuss possible changes. Most of those groups have already made their views known at earlier stages for the purposes of up-dating the law. A basic conflict could now arise regarding the extent to which co-op law should reflect pure co-op philosophy based on the inter- nationally recognised principles such as democratic control through one-member, one-vote. British Industrial and Provident Acts require societies to be bona fide co-ops before registration. As many Irish agricultural co-opera- tives are taking the route of forming Public Limited Companies, PLC, with shares traded on the Stock exchange, it is becoming very difficult to define precisely a "bona fide co-op". Legislative Reform - a Difficult Task

N ew legislation governing co-operatives was promi sed by t he Mi n i s t er for I ndus t ry and Comme r ce (then M r . Al be rt Reynolds TD) at t he annual mee t i ng of t he Irish Co-operat i ve Organ i sa t i on Soc i e ty ( ICOS) on 7 November 1 9 8 8 . A mode rn code of co-operative l aw wou ld be impor t ant to a w i de range of interests: agri-groups, credit unions, new wave worker and c ommun i ty co - ops, se l f -he lp hous i ng groups and t he legal and accoun t ancy profess ions.

The inadequacy of existing legislation on co-ops has been widely acknowledged by the co- operative movement and docu- mented in authoritative reports. The Industrial and Provident Societies Act, 1893 is still the principal statute under which most co-operatives register with the official authority, the Registrar of Friendly Societies. The Act of 1893 should not be condemned solely on the basis of its Victorian origins. It was flexible and in general served its purposes fairly well over the past century. Flexibility has dis- advantages reflected in the Industrial and Provident Societies Acts being used for business purposes remote from a co-op, a term which was not defined by statute. Societies' rules, such as those based on model rules of Irish Co-op Organisation Society (ICOS) are the usual indicators of a bona fide co-op. The main inadequacy is the lack of a modern code of laws to cater spec i f i ca l ly for co- operatives operating in current commercial realities. Reports call for New Laws Many authoritative and repre- sentative reports have been prepared in recent decades regarding the Irish co-operative movement. During the Lemass era, the Report of the Committee on Co-operative Societies under the late Kevin Mangan, Registrar of Friendly Societies, recommended in 1963 that new legislation was required. 1 A subsequent Registrar stated in his annual statutory reports that he had submitted proposals for amending legislation to the Minister for Industry and Commerce in 1983. 2 More recently there were three

impo r t ant reports: the Irish Congress of Trade Unions, 1985; 3 the Oireachtas Joint Committee on Small Businesses 1986; 4 and the Special Committee of the Society for Co-operative Studies in Ireland, 1986. 5 While details and emphasis differ, the reports' recommen- dations all point to the need for new legislation on co-operatives. The Co-op Studies Special Committee Report on the Wider by An t hony Qu i nn, B a rrister-at-La w M A , BC omm . , Di p .Pub l ic Adm . , F I I S, Dip. Lagal St ud i es Application of the Co-op System, 1986, reference 5, was vital. It represented a strong principled view among relevant co-operative umbrella organisations, trade unions and official agencies that new legislation should specifically include the internationally recognised co-op principles e.g. democratic control (one member, one vote in primary societies) based on members' participation rather than amounts of capital invested, and also co-operation among co-ops. 6 Some Amending Leglsletion While the principal relevant Act remains that of 1893, there have been some amendments over the years. Following the Mangan report referred to above, reference 1, the Credit Union Act, 1966 facilitated official registration and supervision of credit unions which are a special category of industrial and provident societies. The Industrial and Provident Societies (Amendment)

Anthony Quinn

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