Cooperatives and Social Justice

March 14, 2012 § Leave a comment

Cooperative and Social Justice

Cooperative and Social Justice

“If given the right supportive environment, cooperatives could help in profound ways to achieve social justice, where it is lacking.”

Throughout the world today, societies are been torn apart due to the fact that various social groups and classes are not getting their due respect from other forces in society. Societies for all are therefore a difficult reality to create and sustain. Social justice is an urgent need and demand in all regions of the world.

Many societies are lacking social justice which could be seen as equal opportunity treatment of all persons in society. It focuses on the dignity of each individual. Social justice promotes the participation each individual in the development of their society and to enjoy the rewards of that development. Various institutions have the responsibility to ensure this happens. Yet social justice is absent in many instances.

The significance of cooperatives for social justice

Cooperatives are based on principles and values that speak directly to the issue of social justice. Most traditional cooperatives follow the seven principles of cooperative identity, promoted by the International Cooperative Alliance (ICA), an Apex organization for cooperatives around the world.[1] These principles call for the practice of democracy, equality, equity and solidarity. Cooperatives also embrace the ethical values of honesty, openness, social responsibility and caring for others.

With these principles and values at the core of cooperative operations, the poor, excluded and marginalized sectors of society are usually served well by cooperatives. The financial sector is one area where this has shown well. Financial cooperatives are some of the largest providers of microfinance services to the poor. It is estimated that globally, financial cooperatives reach 78 million clients living below a poverty line of $2 per day. Financial cooperatives thus play a central role in the achievement of an inclusive financial sector that encompasses the poor.

Through their commitment to servicing the poor and underserved, financial cooperatives are helping to lessen the burden of poverty.  Financial cooperatives, by providing savings products, help to reduce members’ vulnerabilities to shocks such as medical emergencies. In Senegal, the health mutual, PAMECAS provides affordable insurance for savings and health care to disadvantaged and low-income families. [2] Similarly, the CIC Insurance Group in Kenya provides affordable insurance to populations left out by mainstream insurance companies. In addition to risk protection services for the poor and the disadvantaged, CIC is the largest provider of micro insurance in Kenya.[3]

Cooperatives have also been instrumental in promoting inclusive development in rural areas, helping to both strengthen and diversify rural economies. Financial cooperatives provide access to credit for members who might not typically have access to the larger savings and commercial banks. This is significant in markets where financial providers are absent owing to poor revenue prospects, high risks, or high transaction costs. This access to financial services often supports the formation of small and micro businesses.

Cooperatives have also been able to strengthen agricultural production and improve access of poor farmers, especially through engaging in fair trade arrangements. Small farmers who struggle to create and sustain businesses of their own are able to increase farm revenues, lower marketing and information-gathering costs, as well as enter into high-value supply chains that they would not be able to do on their own.

In Peru, the organizational and technological capacities of the Central Association of Small Producers of Organic Bananas, a cooperative operating under fair trade arrangements, enable it to promote fair trade in the commercial chain and diversify the productive system in a sustainable manner. In three years the Association’s profits have grown rapidly and it has strengthened food security and improved the social, economic, cultural and environmental situation of its members and community.  The 126 members of the Toledo Cacao Growers Association, in Belizerely on cocoa production for their income. For members, fair trade premiums have meant the difference between sending their children to school and keeping them at home to work. For the El Ceibo cacao cooperative in the PlurinationalStateof Bolivia, fair trade has brought new independence and empowerment to farmers who were previously shuffled from one flawed and exploitative agricultural exporting system to another.[4]

Strategic approaches to improve the work of cooperatives 

While the need for more research cannot be denied, that which exists supports the idea that, if given the right supportive environment, cooperatives could help in profound ways to achieve social justice, where it is lacking.

Empowering cooperatives to leverage their capacity to contribute to social justice requires a sound policy and legislative framework. Some guidance on this already exists. Governments adopted the United Nations guidelines on cooperatives in 2001. In 2002, governments also adopted ILO Recommendation No. 193, which emphasizes the need to promote the business potential of cooperatives so they can contribute to sustainable development and decent employment, in the context of the urgent need for social justice. While some countries have used these and other guidance to shape an effective policy environment for cooperatives enterprises more still needs to be done to create greater awareness of  these instruments at all decision-making levels.

The International Year of Cooperatives 2012, declared by the United Nations general Assembly, is one means to raising awareness. The IYC has been put in place not only to raise awareness of these existing instruments, but to raise awareness of the cooperative enterprise model and its potential contributions to social development. By raising awareness of cooperatives – what they are and what they do – the IYC will empower cooperatives to promote their social justice values and encourage governments to create supportive policy and legislative frameworks, where needed.

Even with this support, the challenge of effective implementation of the cooperative principles and values cannot be ignored. The sound governance of cooperatives depends upon a well-informed and active membership base, dedicated to cooperative values and principles. To sustain the drive of cooperatives for social justice, a strong membership base, bound by the democratic one-member-one-vote principle, is essential to addressing weak or unethical management, capture by local politicians, or other conflicts of interests which could divert cooperatives from addressing social justice issues.


[1] International Cooperative Alliance (n.d.) “Statement of the Co-operative Identity”. http://www.ica.coop/coop/principles.html
[2] Read more about PAMECAS at http://www.pamecas.org/
[3] Read more about the CIC insurance group at http://cic.co.ke/
[4] Read more about TCGA and El Ceibo at http://www.globalexchange.org/fairtrade/cocoa/cooperatives

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