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ON THE RAZOR'S EDGE: Organize at All Levels or Risk Extinction
Speech by Bruno Roelants, Secretary General of CICOPA (International Organization of Industrial, Artisanal, and Service Producers Cooperatives), 2nd Eastern Conference for Workplace Democracy, University of Massachusetts, Amherst Conference Center (7/14/03)

An Upsurge of Worker Ownership and A Dangerous Development

Since the late 1980s (and the various financial crises in Mexico and Asia, for example, and the problems of unemployment in Europe) there has been an upsurge of worker cooperatives in many, many places. In some places, like Argentina and Brazil, people are even talking of a kind of a worker owned “hurricane”. Dozens of enterprises over the last few years have been occupied and managed by the workers in Argentina in order to survive. In South Korea, we found the same thing after the crisis of 1997-98.

At the same time, there has been a very dangerous development, the evolution of fake worker cooperatives especially in Latin America. This is a serious problem in countries like Columbia, Brazil, Uruguay, and Argentina. The name of worker cooperatives is being used to create structures of sheer exploitation of workers—hundreds of thousands of workers are in this situation. Private enterprises have, from one day to the next, laid off their entire workforce and obliged them to constitute a fake cooperative in order to re-contract labor relations. This gives cooperatives a bad name. The workers do not have any democracy. There is no participation. There is no ownership. This is a perversion of the cooperative idea and probably it is the biggest perversion of the cooperative idea in the whole history of the cooperative movement.

Secondary and Tertiary Levels of Organization

Let me now talk about structures of organization. The experience of cooperatives at the grassroots level, at the enterprise primary level, is only fifty percent of the cooperative experience. The other fifty percent of the cooperative experience has to do with the second, third... levels of organization: all the support institutions, federations, groups, consortia, mutual funds, which are structures normally democratically owned and managed by the grassroots enterprises.

      The evolution of the cooperative movement in the world would be absolutely unexplainable without the evolution of this panoply of support institutions of different kinds. There are cooperative development centers, which provide business support to the grassroots enterprises; the more representative types of organizations which provide all the cohesion inside one part of the cooperative movement or within the whole cooperative movement in a given country; and the cooperative corporate groups. These corporate groups are evolving in the world and are increasingly seen as a response to globalization. Interestingly enough, cooperative groups are evolving not only in sectors that are typically open to competition, like electronics, but also in the field of social services. These social cooperatives often provide social services, to bring into their workforce disadvantaged people like the disabled, ex-prostitutes, ex-drug addicts and so on. These emerging consortia of social cooperatives are very locally based inter-groupings of very small enterprises. These cooperatives often compete with other enterprises in big public procurement tenders (as in the Italian case). The constitution of cooperatives in big corporate groups is becoming increasingly felt as a necessity in order to withstand global corporate competition, which has impinged on this sector. In Italy, one cooperative corporation brings together 1,000 very, very small and frail enterprises and is able to withstand the competition. In Spain, the Mondragon Corporation now groups 70,000 workers. By the way, they also have consumer cooperatives, but they are all worker cooperatives. The Mondragon Corporation has become the number seven enterprise group in Spain—one of the very big players (despite starting from a single worker cooperative with 16 workers 50 years ago).

The idea of creating groups or associations is now extending quickly, and especially among worker cooperatives, which very often are in services and industries where competition is very tough. For example, there is a current drive towards the creation of cooperative corporate groups as a development strategy in Latin and Central America. These are groups—holding companies—not federations.

The group structure is one part of the response given by worker cooperatives at the grassroots level in order to cooperate together. Another one is the establishment of federations. This is a different tactic of organization, but it is also very important. Why is a federation necessary? With a network of business support centers, with big corporate cooperative groups, and so on, the basic needs of worker cooperatives may be satisfied. However, increasingly, it is being felt that this is not enough, because even in the conventional corporate world lobbying and organization in general have become increasingly important. Strangely enough, the business organizations in Brussels or Washington, DC—big centers of lobbying—cooperate. They cooperate better together than we do in a cooperative system. This shows that the corporate world has understood that, especially now under this new corporate globalization, you absolutely need to create alliances, you need to create pacts, and you need to lobby the government, the U.N., and the international organizations. Over the last few decades and especially the last few years, we've noticed at the national level, at the regional level, and at the world level, we really have to be much better in terms of organization if we want to survive in this world as worker cooperatives and as cooperatives in general.

Our experience on the world level is that because of the specificity of worker cooperatives, it is extremely important that worker cooperatives organize together, at a sub-national and a national level; and from there, cooperate at the inter-sectoral level with the organizations that exist at the inter-sectoral level. It is very important that at the inter-sectoral level, within the inter-sectoral system, that worker cooperatives are well-defined as an organized structure, within an articulated organizational system. This is additionally important for the inter-sectoral organization itself, not only for the worker cooperative interests. It is important because worker cooperatives are now becoming a big part of the cooperative movement, because they are increasing all over the world.

A U.S. Worker Cooperative Federation

I know you in the U.S. are talking about creating a national federation. It's difficult to create a federation of worker cooperatives, especially in such a big country as the United States. At the same time, we from the European perspective consider this as extremely important. I've had conversations all over the world – in Latin America, Asia and Europe – about this attempt to create a U.S. federation. Everywhere this has aroused a keen interest: first, for the sheer reason that the U.S. is a big country with a lot of inhabitants. So in terms of being part of the world population, it's very important that the U.S. be covered with a federation. But also because of the U.S. position in the world. I'm not here to discuss politics, but it is obvious that it is quite refreshing, within the worker cooperative movement, to see the emergence of a worker cooperative movement in the U.S. which can provide a different image of this country in the world.

We don't have time here to go into a more in-depth analysis of why a federation is necessary, or what it can bring in concrete terms to the grassroots worker cooperatives. The figures speak for themselves. Some members in European countries, for example, pay high levels of dues because they know the organization is protecting their interests and is a link between them, the European and the international levels. The national level is, therefore, a link to the grassroots level, and to the more international levels.

We also have to do internal lobbying within the cooperative movement. Lobbying in the sense of simply trying to discuss, negotiate, and make each other understand each other's position is very important. Also, establishing a federation of worker cooperatives in a given country facilitates a dialogue with other sectors and with the inter-sectoral structure or structures. That makes it easier. It's not that we're trying to have more power or less power. It's a question of really cooperating in the end, which is what we're supposed to be here for. At the international level, in which I am working personally, we have also felt that increasingly we are able to cooperate with the inter-sectoral structures and with the other sectors. In fact, more and more, especially now that the International Cooperative Alliance is in a major reform process (of which CICOPA is now a part), I have witnessed a rediscovery of the sectors and of the worker cooperative sector in particular by the International Cooperative Alliance—both at the board level and the secretarial level. We have been involved in discussions about the reform of the ICA, and thus able to protect the interests of worker cooperatives everywhere in the world. This is meaningful participation and a very promising development.

International Success

I will give you two examples of the benefits of working at the world level, to make it less abstract. First, eight years ago, the International Cooperative Alliance, after much discussion, managed to establish world standards of what a cooperative is supposed to be: that included a definition, a set of seven principles, and ten values. Seven years after that, those principles agreed upon within the cooperative movement became part of a text that has been approved by most of the countries in the world. It has become an inter-governmental recommendation under the International Labor Organization, the ILO.        

This happened in 2002, and I had the chance to be part of those negotiations. In the ILO negotiations, we had to negotiate together with the employers, with the trade unions, and the governments—who were not particularly interested in or sympathetic to our perspective. It was tough to try to include those standards of cooperatives into the ILO general recommendations without change. But we did it. It is an important victory because it means that now, for example, the U.S. government and the U.S. employers' organization and the U.S. trade unions all have voted in favor of a recommendation which establishes the basic standards not only of what cooperatives are, but how they should be promoted. So, this recommendation is a real policy text, which can be used as an instrument by all the cooperative organizations around the world, and in particular in this country.

That is an example of how important it is to work at the world level. It was also important for us as a worker cooperative organization to be part of the process, because worker cooperatives have very real interests to protect and to promote. We were able to make sure that this recommendation would also serve the interests of worker cooperatives in particular. So, we are now working towards the establishment of standards of worker cooperatives that would be complementary to the ICA principles, because we feel that those standards are not sufficient. Establishing standards of worker cooperatives at the world level is important also for concrete applications of such legislation and also to gradually have better standards of what employee ownership in general is. That's a first step. Since on the worker cooperative side, we are more organized at the world level, it's easier for us to have a consensus. We are almost reaching it now. In September 2003, we had a conference in Oslo, a world conference on worker cooperatives, in which we finalized this “Oslo Declaration” with minimum standards of what a worker cooperative should be all around the world. The final document will be released in March 2004. This is also an important step towards eventually identifying the common denominator between worker cooperatives and other employee-owned businesses.

In addition, this Declaration can become a much more powerful instrument as I said, not only a definition, but also for the promotion of worker cooperatives in the world. We are in a globalized system in which the corporate world is increasingly organized at the world level. So, they are in a much better position to establish policies at the world level, which will trickle down into national and regional policies. If we don't do anything to counter this, we will move towards the destruction of the cooperative movement. I'm not trying to be apocalyptic, but simply to explain that we are in a period in which we can actually become a very important solution to the problems of the 21st century—I would even say one of the main solutions.

However, it's also clear that we could all be completely brushed away. This is truly the moment where we are on the razor's edge and have to decide whether we want to be on the losing side or win the battle. I think we can win it, but then we have to be well organized at all levels: sub-national, national, regional, and at the world level. Thank you.

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