Cooperative unions and federations as part of the governance and organizational design of primary cooperatives

When dealing with the governance and organizational design of primary cooperatives policies, laws and regulations generally do not elaborate on the integration of cooperatives through unions and federations. For example, the... [ view full abstract ]

When dealing with the governance and organizational design of primary cooperatives policies, laws and regulations generally do not elaborate on the integration of cooperatives through unions and federations. For example, the 1995 International Cooperative Alliance Statement on the co-operative identity (ICA Statement) only mentions “cooperatives at other [than primary] levels” in its 1st Principle and it states in its 6th Principle that “Co-operatives serve their members most effectively […] by working together through […] structures” at all levels. The 2002 International Labor Organization Recommendation No. 193 concerning the promotion of cooperatives (ILO R. 193) appeals in its Paragraph 6.(d) to governments to “facilitate the membership of cooperatives in cooperative structures responding to the needs of cooperative members”.
Observation lends to assume that the success of primary cooperatives is also due to their being part of a union and/or a federation of cooperatives which provides economic and/or advisory services and gives political voice to their member cooperatives. This observation contrast with the fact that only relatively few countries do have effective cooperative unions and federations. Whether their absence is due to a lack of a regulatory framework or whether that lack reflects a social reality might be an interesting question.
This paper is to demonstrate that integration through unions and federations should be an intrinsic part of the governance and organizational design of cooperatives in order to allow their potential to fully develop. The cooperative principles which are to guide cooperatives in the pursuit of their objective become more effective when primary cooperatives are organized in unions and federations according to the principles set forth in the ICA Statement and in the ILO R.193. This institutionalization differentiates therefore cooperative unions and federations from enterprise networks and clusters, to which cooperative enterprises might in addition adhere.