The Gazette 1989

GAZETTE

JULY 1989

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.

(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.

(C)

Company

Law is

being

reformed

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.

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

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.

The

large assets of the Credit Union

226

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.

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:

Committee on Co-operative Societies,

Report,

1963, Pr. 7411, Government

Publications.

Reports of the Registrar of Friendly

Societies,

various years especially 1984

et seq. Govt. Publications.

Report on Worker Co-operatives,

Irish

Congress of Trade Unions, Raglan Rd.,

Dublin 4, 1985.

4. Joint Oireachtas Committee on Small

Businesses,

6th Report - Development

and Management of Small Business Co-

ops.

1986, PL 4237, Government

Publications.

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.

International Co-operative Principles,

International Co-operative Alliance, 15

Route des Morillons, Grand-Saconnex,

Geneva, Switzerland.

Strategy for the Irish Dairy Industry

1987,

Irish Co-op Organisation Society,

Plunkett House, Dublin 2.

Social Housing

and other publications.

National Association of Building Co-ops,

Housing Centre, Plunkett House,

Dublin 2.

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

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.

Co-op Ireland,

monthly journal, Tara

Publications, Poolbeg Street, Dublin 2,

on behalf of IC0S.

The

Golden

Triangle

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

reference 5. He has

published

material in Ireland and abroad on

the co-op movement. This article is

written in his personal capacity.