Employee-owned businesses in Argentina that have been affected by Covid-19 will be able to apply for state funding through the Self-Managed Work Programme, the government confirmed on 1 May.
Co-ops welcomed the announcement but said they needed additional support.
Founded in 2004, the Self-Managed Work Programme helps employee-owned businesses maintain jobs, improve their competitiveness and provide an adequate, safe working environment. The government has recently clarified that self-managed enterprises, including co-operatives managed by worker-owners, qualify for emergency financial assistance under the programme.
Co-ops that have had to cease operation or have seen their income plummet due to social isolation can access emergency financial support for their employees for up to two months. The period could be extended depending on how long the isolation measures will be in place for and the available budget for the fund.
The funding is available to employee-managed enterprises, including worker co-ops, provided that the dividend received by each member is less than the value of a minimum wage. However, the self-managed monthly allowance, which is up to 6,500 pesos (£216) per worker, is incompatible with the receipt of remuneration from an activity outside the self-managed productive unit, or other types of benefits, including unemployment benefits, pensions, supplementary social benefits or financial aid provided through employment or job training programmes.
Over 12,000 co-ops operate in Argentina, accounting for 10% of the country’s GDP. According to the National Institute of Association and Social Economy (INAES), around 10% of co-ops have already asked the government for support during the crisis, particularly with continuing to pay workers.
The sector argues that in spite of some support being available, co-ops are still unable to access certain relief programmes, including the Emergency Work Assistance Programme (Repro).
“This is a discriminatory act by which the worker co-operatives, just because they have a different legal format from that of the for-profit companies, were not included,” said Ramiro Martínez, president of the Conarcoop confederation of worker co-ops.
He added that co-ops should benefit from the same level of support as other enterprises.
Repro assists SMEs and large companies affected by the Covid-19 crisis in the payment of part or all of their staff wages. However, worker and industrial co-operatives, the majority of which have had to cease operating, cannot receive this benefit. The government is also giving a one-off emergency payment to employees in sectors most affected by the crisis who do not receive unemployment benefits or other forms of benefits. This single bonus of 10,000 pesos (£333) is not available to worker co-ops due to their specific legal status, which makes the workers owners rather than employees.
Other support available which co-ops can access includes 12% fixed-rate loans and being protected from evictions or suspension of services due to non-payment.
The government allocated a total of ARS 2.2bn (£265m) to help SMEs, co-ops, and enterprises produce medical equipment during the crisis. The 12% fixed-rate loans are available for co-operatives that have been operating for a minimum of 12 months, who need to increase their production capacity to respond to the need for medical equipment or to provide technological solutions to help the prevention, diagnosis, treatment and other Covid-19 related aspects. Co-operatives can also request 24% fixed-rate credits to pay salaries.
Representatives from co-operative federations including Ariel Guarco from national apex body Cooperar took part in video conferences with government ministers on 29 April. The sector continues to engage with the government to explore how co-ops could benefit from further support.