With the International Year of Cooperatives over, hard work continues around the world creating conducive operating environments for co-operative enterprises.
There is a flurry of initiatives under way in a number of countries, notably the UK government’s pledge to double the size of the UK co-operative and mutual economy. In Indonesia, there is an ambitious plan to create 80,000 Red and White Village Co-operatives to help drive rural development. Reform of India’s co-operative sector continues apace, and many other countries are reviewing their co-op law.
In the Philippines, bills are going before the Senate for the promotion of agricultural cooperatives, and to strengthen the national agriculture and fisheries extension system.
In Papua New Guinea, the government has set a medium-term development plan with a policy review of the framework for co-ops, to modernise them as drivers of inclusive and sustainable economic growth. As part of this, commerce and industry minister Win Daki is attending a regional forum organised by the ICA’s Asia-Pacific office.
In Kuwait, ministers have installed monitoring equipment in retail co-ops to keep tabs on inventory, financial and administrative records. And in Ecuador, court battles have been sparked by new laws threatening the existence of financial co-ops.
Keeping tabs on complex and uneven picture is the International Cooperative Alliance (ICA), whose regional and global offices are launching the second phase of the Legal Framework Analysis (LFA) for the sector, co-funded by the ICA-EU Framework Partnership Agreement or #Coops4Dev.
Its work will focus on equipping ICA teams with the methodologies and technical tools they need, identifying co-op law experts, and “strengthening mutual learning and co-operation among the teams to deliver results through 2028”.
This is crucial work, with sector growth in many countries hampered by an unhelpful regulatory environment.
“Co-operative-friendly legislation is essential to creating an enabling and supportive environment for the development of co-operatives,” says the ICA. “Yet, in many countries, legal frameworks do not adequately translate the co-operative values and principles into legal rules, and often do not fully consider the existing international legal standards on co-operatives, limiting the full potential of the co-operative model and its impact on communities at the local, regional and international levels.”
Building on the 79 national reports produced under a previous partnership between the ICA and European Union, this new phase of work will review existing studies and produce a “significant number of new country reports”.
The project will also look to support comparative research across regions, and develop internationally comparative legal analyses and thematic reports similar to the one on co-operative housing published by the ICA in collaboration with the Coop Housing International on the United Nations Day (24 Oct) 2025 at the Peace Palace in the Hague.
“The goal is to deliver an evidence-based analysis of co-operative legal frameworks with concrete recommendations to strengthen co-operative legislation and policies, support advocacy efforts, and promote a level playing field.
Santosh Kumar, the ICA’s director of legislation, tells Co-op News that the International Statement on the Cooperative Identity is the most crucial factor as it is a source of law and acquiring the nature of customary international law as per Art. 38 (1) of the Statute of the International Court of Justice.
“Some co-operatives themselves appear have forgotten their co-operative nature – some laws tend to companise cooperatives,” he says. That leads them to “run the same race as profit-only companies, a race we’re bound to lose for, it is not ours to run.
“And we’ve understood the urgent need for better implementation of cooperative legislation that is inspired by the Statement on the Cooperative Identity, and it is here that the ICA secretariats are determined to deepen its work. More so, following the related decision of the ICA General Assembly in New Delhi during the launch of the UN IYC.”
The statement is a great achievement, adds Kumar. “Other than the Red Cross, no other international NGO can pride itself on a people-driven standard that has come into international law, the way the ICA and co-operative movement has.”
The next step, per him, is to advocate for binding (minimum) legal standards – that would guarantee the right legal treatement for co-operatives of all types, everywhere.
This is what, he adds, the ILO Promotion of Cooperatives Recommendation (No. 193) sets out to achieve. And, that this Recommendation might appear as “soft law” but he clarifies that the ILO Constitution, includes binding obligations on the member states on matters concerning Recommendations their implementation, and enforcement.
“States play, and must play an essential role in promoting co-operatives,” says Kumar. “And, often times, this role of the state graduates into being excessive, notably in the finance and insurance sectors, that are often subject to dual regulation – one by the co-op regulator and then the industry regulator, and that falls disproportionately heavily on co-op banks, mutuals and credit unions, which has prompted years of intense lobbying by sector organisations.”
Some of the problems that have occurred in the co-op sector add to this problem, he adds. “Bad news stories – misappropriation of funds, etc – have always existed in all forms of enterprises, and perhaps will continue to exist – but some states are using this to penetrate the autonomy and independence of co-ops, especially in the so called global south where the regulator/registrar was historically a creature of the colonial governments, and is slowly shedding that character.
“The pity in all this, is that the state has a role to defend its own law, and in some cases, has clearly forgotten its duty here – to ensure the co-operative identity is duly translated into legal rules.”
Portugal has “perhaps an ideal co-op law,” he adds, “but is on the verge of handicapping its co-operative support agency, Cases – which itself is organised as a multi-stakeholder co-operative: legal innovation in its own right.”
Other countries – Spain, Italy, France – have been “amazing”, he says, in terms of capital raising, tax treatment, new services, and co-operative-specific audits.
And in the developing world, inspiration for creating new co-ops is being taken from the big retail co-ops and large and popular co-operative banks, where, Kumar thinks, scale could mean a “risk of losing the co-op fabric if not done with caution, care and context”.
“The trend worldwide, when it comes to finding ways to make co-ops competitive, is to look at that scale. If the Netherlands can have a Rabobank, why not our country, people ask.”
There is a conundrum here: where there is an urgent need to develop economies, services or infrastructure, the state can provide invaluable support. But how should that government muscle be applied, and where does it leave co-op autonomy?
State-led co-op projects include the Sahakar Taxi Cooperative, a rival to ride-hailing apps like Uber launched last year by the Indian government with the help of large co-ops. “This co-operative is causing a revolution in India,” says Kumar, “and knowing more about its membership structure, financial matrix and member participation will be crucial to know how it can be emulated in other parts of the world.”
To protect co-ops, the law needs to address issues around member participation, adds Kumar, pointing to the failure in 2020 of Canada’s Mountain Equipment Co-op, where a member vote was bypassed as it filed for creditor protection and sold its assets. “What rights and obligations do members have?” asks Kumar. “We often talk about the minimum number of members required to form co-operatives, but do we ever talk about maximum number of members?”
On the other hand, there is a more radical, small-scale, grassroots co-operation being born. “We’re seeing a reinvestment by young people in Europe in the co-op idea – despite the bad associations the model has had in Eastern Europe, or failures and companisation that have occurred in Western Europe. There is a new and genuine cooperation coming from the fringes, from younger people – who seem to truly believe in the cooperative idea as a magic wand, and why not!”
With its new review of co-op law, the ICA hopes to foster this co-operative spirit, one which could offer a more positive, people-centred future in an increasingly uncertain world. This year, the ICA is also going to launch a unique database on co-operative legislation and engage cooperatives on the topic – often considered dry and inaccessible.
“The plan is to get co-operatives involved and excited about law and assist member organisations in using it to advance co-operatives and their impact, worldwide,” said Kumar.
