The Uralungal Labour Contract Cooperative Society

Originally published at Tricontenintal: Institute for Social Research

In 1925, before the communist movement was established in southwestern India, the followers of the social reformer Vayaleri Kunhikannan Gurukkal, also known as Sri Vagbhatananda Guru, (1885–1939) founded the Uralungal Labour Contract Cooperative Society (ULCCS) to provide construction workers with social protection. Today, the ULCCS is Asia’s largest workers’ cooperative, and it was ranked second in the 2021 World Cooperative Monitor list of industry and utilities cooperatives. United Nations Development Programme Resident Coordinator in India Lise Grande calls it a model cooperative whose success provides ‘great lessons for the rest of the world’.1

From its origins amongst a group of labourers, ULCCS, located in a rural part of Malabar in northern Kerala, now constructs roads and bridges, buildings, and software systems. The cooperative’s commitment to social harmony and inclusion as well as worker cooperation has allowed it to succeed in areas of social production that are often challenging for cooperatives.

The ULCCS was formed at a time when work was difficult to come by and when forms of caste and class discrimination were even more severe than they are today. In 1917, Sri Vagbhatananda Guru’s followers started the Atma Vidya Sangham school, whose members formed the United Credit Cooperative in 1922 to help each other if any of them faced financial problems due to discrimination in the credit market, which was controlled by the dominant castes. They also founded a school for their children, who had been denied education by the dominant castes in the region. Taking the advice of Vagbhatananda, they decided to form the Mutual Aid Society of Daily Wage Labourers in 1924 to circumvent the labour ban that the elite had imposed on them in an effort to curtail their struggle against caste discrimination. Then, on 13 February 1925, the workers created the Uralungal Kooli Velakkaarude Paraspara Sahaaya Sahakarana Sangham (Uralungal Labourers’ Mutual Aid and Cooperative Society, now ULCCS). Slowly, more and more workers joined the ULCCS, which now has a presence across Kerala.

During its initial years, the ULCCS was seldom able to obtain contracts, and when it did, the tender (or contract) amounts were set at a very low level. In order to compete, the ULCCS underbid private contractors, offering 27.5% less than the private bids. Though this enabled them to get some contracts, the profit margins were negligible. Inexperience with road work and other forms of large-scale construction led to problems for the ULCCS. The cooperative sustained itself by obtaining minor contracts from local governments and by receiving short-term loans from the better-off members of the cooperative. The ULCCS also received funds from microfinance systems such as payattu (money-gathering games) and kurikkalyaanam (marriage announcements)2 and used its growing prestige to provide assistance for its members’ basic needs by collecting donations from local merchants.

As time went by, ULCCS workers improved their skills and became more adept at basic business practices. The increased efficiency and quality of their work in turn attracted more lucrative contracts, and their work ethic introduced a new culture of excellence in Kerala’s construction industry. By the 1940s, they began to receive funding from the Malabar Cooperative Central Bank as well as fixed deposits by the public in ULCCS schemes.

Over the past century, the ULCCS has grown from a collective with an initial capital of INR 0.37 (USD 0.13 in 1925 dollars) to an annual revenue of INR 25 billion (USD 300 million) in 2023. It is comprised of 18,000 workers, including more than 1,000 engineers and 1,200 technicians. The cooperative not only advances the well-being of its workers and the surrounding community, fulfilling thirteen out of the seventeen United Nations Sustainable Development Goals, but also ensures that the quality of the work (including its timely completion) is balanced by reasonable costs. These factors, alongside the ULCCS’s modern construction techniques, allow it to compete against private corporations and win major contracts, such as those from the National Highway Authority of India, the Union Ministry of Road Transport and Highways, and the Government of Kerala. The ULCCS has completed over 7,500 major projects and is currently working on 500 projects worth INR 6.5 billion. Since it operates as a cooperative, the ULCCS has been able to provide better pay for its workers than they would earn in the private or even government sectors.

As part of its effort to keep pace with workers’ aspirations, the ULCCS has entered various sectors of the knowledge economy such as software development, diversifying from its initial form as a construction workers’ cooperative to take on the challenges facing cities and work in our times. These initiatives include:

1. UL CyberPark in Kozhikode, the first cyberpark in India’s cooperative sector and part of one of the central government’s Coastal Economic Zones.
2. UL Technology Solutions, a next-generation digital solutions firm located in the UL CyberPark.
3. The arts and craft villages Sargaalaya (in Iringal) and the Kerala Arts & Crafts Village (in Kovalam), which the ULCSS manages on behalf of the Government of Kerala. These villages help artisans produce handicrafts for the domestic and international markets.
4. UL Housing, which uses the cooperative’s construction skills to build apartment projects under the brand name UL SpaceUs. The first such building, called One Anthem, is in the UL CyberPark.
5. The high-tech Matter Material Testing and Research Laboratory, or MatterLab, an outgrowth of the ULCCS’s construction work created in 2021 to develop and test new sustainable construction materials.
6. The Indian Institute of Infrastructure and Construction, which ULCCS manages on behalf of the Government of Kerala in collaboration with national and international educational institutions.
7. UL Education, which develops students’ skills through a range of institutions and projects, such as
   1. The Madappally Academic Project for Learning and Empowerment
   2. The Vagbhatananda Edu Project
   3. The Scholastic Excellence Programme for Students
   4. The UL Space Club (for young aspiring astronauts).
   5. The ULCCS Centenary LP School, an aided lower primary school in Muttungal managed by the ULCCS which offers classes from kindergarten to the 4^th standard.
8. ULCCS Charitable and Welfare Foundation, the cooperative’s social responsibility wing, which runs three key projects under the name UL Care:
   1. The Prasanthi School for Children with Special Needs
   2. The Nayanar Sadanam Institute of Vocational Training and Placement for Adults with Intellectual Challenges
   3. The Madithattu Geriatric Centre
9. UL Insight, a management consultancy firm jointly managed with Insight Advisory and Consulting India

As a workers’ cooperative, the ULCCS does not allow non-workers to become members. Its board – which is elected by and represents the workers – has thirteen directors, each of whom has between thirty and thirty-five years of experience in various sectors of the construction industry. Each worksite, including the project’s management, is overseen by a board member who evaluates the work at the end of each day.

• 1

  ‘Kozhikode ULCCS a Role Model for Labour Cooperatives, Says UN Official’, The Hindu, 19 September 2013, https://www.thehindu.com/news/cities/kozhikode/kozhikode-ulccs-a-role-model-for-labour-cooperatives-says-un-official/article5144802.ece.

• 2

  Panam payattu and kurikkalyaanam are popular methods in rural areas of Malabar to collect money to build homes, pay for weddings, send sons to work in the Persian Gulf region, and meet other financial needs. The person in need holds an event where they serve tea and snacks to attendees, who contribute money. The organiser of the event pays back the money at another event organised by another person, and so on.