ABC REPORT ON COOPERATIVES BILL AMENDMENT WORKSHOP
DATE: 27 & 28 AUGUST 2009
VANUE: BLOEM SPA, BLOEMFONTEIN
Report available in WORD by clicking here
1. INTRODUCTION
It has long been common knowledge that the Cooperatives Act 14 of 2005 has a number of deficiencies that require amending. Government (The dti) already set in motion a process in early 2008 to amend the current Act. The Workshop held in January 2008, however, yielded very little in the way of constructive progress due to highly divergent positions taken by different role players and stakeholders.
Since January 2008, however, Government together with Business, Community and Labour have been developing Government’s Cooperative Strategy through the NEDLAC process. The ABC, through it representation in BUSA’s Business Team at NEDLAC, played a significant role in finding common ground between the different role players in developing an inclusive Cooperative Strategy.
This development led to The dti reconvening a workshop to amend Act 14 of 2005, and this Workshop was held on 27 and 28 August 2009 at Bloem Spa in Bloemfontein. A number of ABC members also participated in the Workshop process in order to argue for an enabling environment in which businesses in the cooperative form could grow and flourish. The Workshop was facilitated by Mr Jeffrey Ndumo of dti and Prof Nic Olivier (and assistants) of the University of Pretoria.
In his introduction, Mr Ndumo, Chief Director for Cooperatives within The dti, emphasized that the new legislation must respond to both the developed and developing sectors of the economy of South Africa. Furthermore, cooperatives are a huge priority for Government and a major vehicle for development. These points of departure are welcomed by the ABC.
2. PROCESS
The facilitators explained the process to be followed in developing and signing off on the proposed Cooperative Amendment Bill, and emphasized that the Bloemfontein Workshop is the start of the deliberations in this regard.
After the drafting of the Bill by the consultants (UP) following the Workshop, it would be made available for broad consultation on a province by province basis. In other words, role players and stakeholders would again get an opportunity to study and influence the Bill. Once reasonable consensus has been achieved, the Bill will be referred to Parliament, who has its own consultation process and deliberations as well. Once signed off by Parliament and Cabinet, the President would need to assent the Bill to effect the Cooperatives Amendment Act. Thereafter stakeholders would again be involved in the writing of the all important Regulations of the Act.
Responding to questions, the following two issues were noted:
· The grace period for “old” cooperatives to comply with current legislation would be extended so as to accommodate the concern of these cooperatives that the new legislation would not be concluded by the deadline date of the grace period.
· The proposed new tax regime for cooperatives is a different legislative process and will be managed separately from the abovementioned process.
3. MAJOR ISSUES OF DISCUSSION
Obviously it is impossible to capture all the points discussed, but from an ABC perspective it is important to highlight a couple of the major issues that could or do impact on agricultural cooperatives that are members of the ABC. These, with their outcomes, are:
· There was much debate, again, on the inclusivity/exclusivity approach for the Preamble. The outcome was that target/priority groups would be listed, but it would be emphasized that the legislation would be inclusive of all the people of South Africa.
· A proposal to set the minimum number of members that could form/belong to a cooperative at 13, was hotly debated. The outcome was that a minimum of 5 was agreed to.
· On the issue of membership votes, there was again considerable debate, given ICA Rules of a democratic one member one vote principle, and on the other hand the practice of weighted membership voting rights by certain cooperatives, also internationally. The outcome was that different positions were recognized, but that some form of weighted voting rights would probably be accommodated with a maximum cap of either 10 of 15%. This could further be described and determined through the drafting of the Regulations of the Act.
· There was considerable debate on the proposed substantial limiting of proxies for general meetings. The outcome was that for proxies some form of reasonable limitation would instituted, but not nearly to the extent originally proposed.
· The issue of legislating agricultural cooperatives to use the name “agricultural” in their name was also again debated. Outcome: It was agreed that the name “agricultural” would be included in the registered name with CIPRO, but that brand and trading names would be accommodated/allowed for. This should thus not be a limiting factor to business operations and ABC members who are cooperatives.
· A proposal to limit the period a director may serve to 2 terms was debated. Outcome: This should rather be left to the discretion of individual cooperatives and, if necessary, should be included and described in the constitution of a cooperative.
4. CONCLUSION
Diagrammatic representation of process forward:
The dti and Consultants to draft Bill
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To Deputy Ministers of The dti and Economic Planning (September 2009).
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To Provincial Departments of Economic Development and Cooperatives in provinces for Provincial Consultation. (Cooperatives to engage with Provincial Departments of Economic Development.)
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To NEDLAC Process.
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To Parliament and Cabinet for proclamation (November 2009).
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To President for assent (March 2010).
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Regulations process.
The ABC’s take on the proceedings was that the engagement was generally positive and constructive. However, we will have to participate in the full process ahead to ensure that those ABC members who want to continue conducting their business in a cooperative form, are enabled to do so through the new legislation.