The Gazette 1989

GAZETTE

JULY 1989

4. Joint Oireachtas Committee on Small Businesses, 6th Report - Development and Management of Small Business Co- ops. 1986, PL 4237, Government Publications. 5. The Wider Application of the Co- operative System in Ireland, 1986, Report of Special Committee of Society for Co-operative Studies in Ireland, Plunkett House, 84 Merrion Square, Dublin 2. 6. International Co-operative Principles, International Co-operative Alliance, 15 Route des Morillons, Grand-Saconnex, Geneva, Switzerland. 7. Strategy for the Irish Dairy Industry 1987, Irish Co-op Organisation Society, Plunkett House, Dublin 2. 8. Social Housing and other publications. National Association of Building Co-ops, Housing Centre, Plunkett House, Dublin 2. 9. Companies (No. 2) Bill, 1987. 10. Review, Vol. 8, No. 49, Feb./March 1988, and other publications, Irish League of Credit Unions, Hillside Drive, Rathfarnham, Dublin 16. 11. Dai! Report, 1431-34, 2 March 1988, Oral Answer by Minister for Industry and Commerce, to Parliamentary Duestion by Deputy McCoy re Co-operative Societies Legislation. Select Generel Bibliogrephy 1. The Irish Co-operative Movement - its History and Development, Patrick Bolger, 1977. ISBN 0 902173 758 hb. 766 pb. Institute of Public Adminis- tration, Dublin. 2. Horace Plunkett, Co-operation and Politics, an Irish Biography, Dr. Trevor West, 1986, ISBN 0 86140 235 9, Colin Smythe/ Catholic University of America Press. 3. Various publications, Centre for Co- operative Studies, University College, Cork. 4. Harmonisation of Company Law: Official Journals of the European Community. Summary in Europen fact sheet no. 11. 5. Company Law: various text-books and Companies Acts. 6. Co-op Ireland, monthly journal, Tara Publications, Poolbeg Street, Dublin 2, on behalf of IC0S. 7. The Golden Triangle - AE Commemorative Lecture; ed. A. Duinn with additional material including some outlined in above article. Society for Co- op Studies, Plunkett House, Dublin 2. Publication by Autumn 1989. *Anthony Quinn, Barrister-at- Law, MA, B.Comm, Dip. Pub. Adm., FIIS, has a special interest in studies of the co-operative movement. A former Assistant Principal of the Registry of Friendly Societies, the official registration body for co-ops, he served on the Special Committee on the Wider Application of the Co-op System referred to in this article at reference 5. He has published material in Ireland and abroad on the co-op movement. This article is written in his personal capacity.

Complications The main developments in recent years which complicate the task of reform of co-operative law are as follows: (A) As agricultural co-ops take the PLC/Stock Exchange route, the large business groups become complex w i th mainstream limited companies co-existing alongside para^ompanies such as Industrial & Provident Societies. These groups may take different forms but the original co-op usually retains control. There is a strong thrust towards rationalisation and mergers. 7 (B) A new wave is emerging of small worker and community co-ops. These are being stimulated by initiatives such as the Co-op Advisory Council and Development Unit in FAS - the Training and Employ- ment Authority. The trade union movement is interested in worker co-ops. Housing co- ops are also active in rural and urban communities. 8 for national and European Community reasons. This reform affects co-ops directly and indirectly. The large agri- groups include main- stream companies which are clearly subject to company law. Para- companies, however, cannot ignore those develop- ments. For example, Industrial & Provident Societies wound- up under the Companies Act will be affected by reformed insolvency provisions. 9 For some purposes, amendments to Companies Acts define " company" to include para- companies such as Industrial & Provident Societies and Friendly Societies. Higher standards required of company directors wi ll raise the standards expected of co-op board members. (D) The all-Ireland credit union (C) Company Law is being reformed

movement and the effects of the financial services revolution must be taken into account. Mr. R. Bourke, former Minister for Industry and Commerce, indicated that a new Credit Union Act would be introduced following a review. Results of Complications Due to the complexities outlined above, there are many variables to be considered in any reform of general co-op law. The needs of small commun i ty and worker groups are clearly distinct from those of the large agri-groups. While stricter provisions of reformed company law are relevant to those large commercial groups, the new wave community and worker co-ops could be stifled by severe and complex legal controls. The inclusion of the international co-op principles in Statute law would be desirable in principle but could cause difficulties for the agri- groups which took the PLC/Stock Exchange route for the purposes of capitalisation. There may be pressure to dilute the co-op philosophy because of tension between (a) the co-op ideal of democratic control based on members' participation; and (b) company norms such as share- holders' rights based on capital invested. It may not now be possible to legally define "bona fide co-op" and flexibility may be necessary. In reply to a Dáil question, there was Ministerial recognition of such difficulties. 11 Conclusion The legislative task is formidable - to frame a modern code of law for Irish co-ops, taking account of tradition, principles, diversity, comp l i ca t i ons and business realities. Interest groups including those representing co-ops will have various views on details of law reform. It is, however, clearly necessary to up-date century-old laws as the Irish co-operative movement faces into the European new Century. References: 1. Committee on Co-operative Societies, Report, 1963, Pr. 7411, Government Publications. 2. Reports of the Registrar of Friendly Societies, various years especially 1984 et seq. Govt. Publications. 3. Report on Worker Co-operatives, Irish Congress of Trade Unions, Raglan Rd., Dublin 4, 1985.

movement, with about 500 credit unions represents over 900,000 members with a total of half a billion Irish pounds in personal savings. Credit unions, a special category of co-op society, require specific new legislation to replace the Credit Union Act, 1966. 10 The large assets of the Credit Union

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