Japan adopts Workers Co-operatives Act

The act provides a legal form for worker co-operatives

New worker co-op legislation in Japan could pave the way for a new wave of co-ops.

The country’s Diet unanimously adopted the legislation on 4 December, which means businesses can now register as worker co-operatives.

Prior to the adoption of the law Japan had no specific legal form for worker co-operatives, which had to register either as non-profit organisations or small and medium enterprises.

Apex bodies Japan Cooperative Alliance (JCA) and Japan Workers’ Cooperative Union (JWCU) had long been campaigning for legislative changes to enable the sector to grow.

“Today, we live in the midst of unease and confusion to which no end is in sight, amid the global COVID-19 pandemic,” said Nobuhiro Furumura, chair of JWCU and board member of the International Organisation of Industrial and Service Cooperatives (Cicopa).

“I cannot help but think that the enactment of the Workers’ Cooperatives Act in Japan under such conditions was somehow inevitable. I see the Act as being intended not merely to establish a way of cooperative but to take on the challenge of returning to the essential fundamentals of society: self governance, human rights, and democracy.”

JWCU consists of 27 member organisations with more than 15,000 members nationwide and a joint turnover of US $300 m (2017).

Cicopa welcomed the news, adding the new law was “a true win for the cooperative movement”.

Related: Japan House of Representatives to discuss new Worker Cooperatives Act

“The passing of this new Act opens a whole new horizon of possibilities for worker co-operatives, as labour recognition in co-operativism becomes a reality,” it said. “It also spreads the positive idea within the Japanese society to start establishing and forming cooperatives on their own, since they know they will be legally backed.”

The new law is the first co-operative act in Japan since the 1978 Forestry Cooperative Act and the eighth co-operative law to have been adopted. Its articles reference the ILO Recommendation 193 on promoting co-operatives and the ICA’s statement on co-operative identity. It also mentions the Sustainable Development Goals, a first for a Japanese law.