“Social and Solidarity Economy: Building a Common ......dimension of the Decent Work Agenda. Enterprises and organizations of the social economy create and sustain jobs and livelihoods,

The Reader 2010

“Social and

Solidarity Economy:

Building a Common

Understanding”

In support of the First edition of the Social and Solidarity Economy Academy,25 -29th October 2010, ITC ILO, Turin, Italy

ByBénédicte Fonteneau, Senior researcher at the Research Center/Leuven University - HIVA /Belgium

Nancy Neamtan, Director General , Chantier de l'Economie Sociale, CanadaFredrick Wanyama, Director, School of Development and Strategic Studies, Maseno, University, Kenya

Leandro Pereira Morais, Profesor del CEA-PUCCAMPINAS - Coordinador del Área de Desarrollo Territorial delInstituto Polis, Brasil

Mathieu de Poorter, ILO Job Creation and Enterprise Development Department Cooperative Programme(EMP/COOP)

Copyright © International Training Centre of the International Labour Organization 2010

This publication enjoys copyright under Protocol 2 of the Universal Copyright Convention. Applications forauthorization to reproduce, translate or adapt part or all of its contents should be addressed to the InternationalTraining Centre of the ILO. The Centre welcomes such applications. Nevertheless, short excerpts may bereproduced without authorization, on condition that the source is indicated.

THE READER 2010: “SOCIAL AND SOLIDARITY ECONOMY: BUILDING A COMMON UNDERSTANDING”

ISBN 978-92-9049-568-0

First edition 2010

First edition of the Social and Solidarity Economy Academy, 25 - 29 October 2010, ITC ILO, Turin, Italy

CoordinationRoberto Di Meglio (ITC ILO Turin)Coumba Diop (ITC ILO Turin)ContactsInternational Training Centre of the ILOViale Maestri del Lavoro, 1010127 Turin, [email protected]://socialeconomy.itcilo.org/en

The designations employed in publications of the International Training Centre of the ILO, which are inconformity with United Nations practice, and the presentation of material therein do not imply the expression ofany opinion whatsoever on the part of the Centre concerning i.a. the legal status of any country, area or territoryor of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed insigned articles, studies and other contributions rests solely with their authors, and publication does notconstitute an endorsement by the Centre of the opinions expressed in them.

Publications of the Centre, as well as a catalogue or list of new publications, can be obtained from the followingaddress:

Publications International Training Centre of the ILOViale Maestri del Lavoro, 1010127 Turin, ItalyTelephone: +39 - 011 - 6936.693Fax: +39 - 011 - 6936.352E-mail: [email protected]

Designed and printed by the International Training Centre of the ILO, Turin - Italy

Acknowledgments

The ILO and the authors of this reader wants to express their gratitude to the following institutions and expertsfor their valuable comments: Prof.Carlo Borzaga University of Trento Dept. of Economics; Mr.FrancisSanzouango, ILO Senior Adviser for Africa, Bureau for Employers' Activities (ACT/EMP) Geneva; Mr.ThierryJEANTET (EURESA);Ms. Karine Pflüger (Social Economy Europe); Mr.Jürgen Schwettmann , Deputy RegionalDirector. ILO Regional Office for Africa, Addis Ababa; CIRIEC (various experts); Ms. Monica Lisa (LearningTechnology Applications Department ITC ILO) Mr.Tom Fox , Social Enterprise Development, ILO Pretoria; Ms.Carlien Van Empel (ILO COOP Geneva); Ms.Joni Simpson (ILO Geneva); Mr. Jan Olsson (European Economicand Social Committee)

SOCIAL AND SOLIDARITY ECONOMY ACADEMY

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Foreword

The Social Economy plays a significant and growing role in our economies and societies, by providingemployment, social protection as well as others social and economic benefits.

Because of their distinctive features and comparative advantages, among others their democratic governanceand autonomous management, the social enterprises and organizations are supported, or are about to besupported, by an increasing number of States. Policy frameworks for the development of the social economyat the national and regional levels are being implemented across all regions of the world. This builds onpartnerships between governments, social partners and civil society.

The social economy promotes values and principles focusing on people’s needs and their community. In thespirit of voluntary participation, self-help and self-reliance, and through the means of enterprises andorganizations, it seeks to balance economic success with fairness and social justice, from the local to theglobal level. The constitutional ILO concepts of justice and of peace are endorsed by the social economyenterprises and organizations, together with other private sector enterprises and the public sector asacknowledged by the ILO and its Constituents in the Declaration on Social Justice for a Fair Globalization(2008), which calls for a focus on people.

The ILO has been involved in the promotion of the social economy since its establishment. In 1920, the ILODirector-General created a Cooperative Branch, now the ILO Cooperative programme (EMP/COOP). The firstILO official document making reference to the social economy dates back to the proceedings of the 11th

Session of the Governing Body (January 1922). In the 1980’s the ILO developed the concept of ‘social finance’,which covers a broad variety of microfinance institutions and services. In 2001, the ILC set a New Consensuson social security that gives the highest priority to extending coverage to those that have none, leading theILO to further increase its support to community-based protection schemes and mutual benefit societies .More recently, the ILO has started to promote ‘social enterprises’ and ‘social entrepreneurship’.

The concept of social economy is already an integral part of many ILO initiatives and programmes, such aslabour-intensive programmes, the promotion of eco-tourism and fair trade, support to indigenous minorities,local economic development projects, ILO/AIDS, green jobs and, more broadly, sustainable enterprises andthe social protection floor. The ILO has developed over decades an extensive expertise in social economy, anddeveloped a comprehensive set of strategies and tools for serving people in their quest of social justicethrough Decent Work. However, these strategies and tools do not cater for the need to define enterprises andorganizations of the social economy as part of a coherent, integrated whole. Such action is necessary toenhance and increase the efficiency of these enterprises and organizations taken individually, as well as theircombined efficiency in terms of the goals pursued.

Promoting social economy is about contributing simultaneously and in a mutually reinforcing manner to eachdimension of the Decent Work Agenda. Enterprises and organizations of the social economy create andsustain jobs and livelihoods, extend social protection, strengthen and extend social dialogue for all workers,and promote the application and enforcement of standards for all. In this time of crisis recovery, the promotionof social economy within the Decent Work Agenda framework is a significant ally for implementing the GlobalJobs Pact, from local to global levels.


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The ILO Regional conference The social economy – Africa’s response to the crisis organized in 2009 inJohannesburg confirmed the rising interests of ILO Constituents, and this conference led to a tripartiteconsensus with the adoption of the Plan of Action for the promotion of social economy enterprises and

organizations. During the 99th ILC Session, Constituents stressed the need to strengthen the work of the Officeon the social economy as important area of Decent Work creation. On the impetus of ILO Regional Office forAfrica, the ILO International Training Centre further decided to support the needs of ILO constituents and othersocial economy stakeholders by organizing a yearly Interregional Academy.

This Reader will serve as a basis to the first edition of the Academy, which will provide a unique interregionalopportunity for policy makers to advance the development of social economy, for workers to better sustainand improve their economic and social conditions, and for entrepreneurs to develop their competitiveness in afairer environment. This Academy will contribute to ILO’s work on the promotion of social economy for DecentWork for all and, by learning and exchanging; the ILO will improve its capacities to better focus on people,towards Social Justice for all.

Mr. François EyraudDirectorInternational Training Centre of the ILO

Mr. Charles DanILO Regional Director for Africa

Mr. Assane DIOPExecutive DirectorSocial Protection Sector (ED/PROTECT)ILO

Mr. José Manuel SALAZAR-XIRINACHSExecutive DirectorEmployment Sector (ED/EMP)ILO


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Introduction

The social and solidarity economy (SSE) refers to organizations and enterprises that are based on principles ofsolidarity and participation and that produce goods and services while pursuing both economic and socialaims. We all know cooperatives, mutual benefit societies, associations or social enterprises that are active inthe social and/or economic sector. The SSE encompasses a variety of organizations and enterprises that allshare social and economic objectives, values and operating principles.

The paradox of the SSE is that it refers to familiar realities although the concept is not always very well knownor commonly understood. The overall objective of this reader is to build a common understanding of the SSE -although there are, of course, multiple ways to describe it. The following five chapters offer some definitionsbut also present different visions of the SSE from an international perspective.

The aim of the first chapter is to build a common understanding of the concept of the SSE. The chapter beginsby mapping the SSE through its most common types of enterprises and organizations. It then describes thecommon features of social and solidarity organizations, demonstrating the coherence of the SSE conceptwhile emphasizing the diverse forms in which the concept can be manifested. The chapter also gives anoverview of some related concepts and approaches used in the SSE.

The second chapter deals with governance and management issues of social and solidarity economy enterprisesand organizations (SSEOs). Indeed, a common feature of SSEOs is that their governance and operations areinfluenced by collective ownership and participatory principles. The chapter also provides insights on thestrengths and weaknesses in managing SSEOs and the opportunities for improving their efficiency. Severalmanagement and governance tools are described in the context of the daily reality of SSEOs.

The development of the SSE often requires public policies to recognize the particularities and added value ofthe SSE in economic, social and societal terms (e.g. forms of governance, outreach of vulnerable groups).Chapter 3 presents some public policies created to support the development of the SSE at the international,national and local levels. The chapter also describes best practices in the elaboration of public policies.

The SSE cannot be developed or sustained by isolated organizations and enterprises. Chapter 4 addressesnetworking and partnerships, which are key factors in building a strong, recognized and visible SSE. SSEOsneed to root themselves in community, mobilize various stakeholders and build strong alliances with socialpartners and public authorities. SSEOs also need to network among themselves at the local, national andinternational levels. Through their federations and networks, they enhance their representation andcollaboration capacities.

Worldwide, our societies are facing huge social and economic challenges. At the international level, severalinternational development frameworks have been elaborated to address these problems. Chapter 5 examineshow SSEOs are contributing to one of these international development frameworks, i.e. the ILO Decent WorkAgenda. It reviews the four objectives and pillars of the Decent Work Agenda (i.e. labour standards and rights atwork, job creation, social protection and social dialogue), and describes and suggests fields of action for SSEOs.

This is the first edition of this reader. The participants in the 2010 ILO Social and Solidarity Academy in Torinowill certainly contribute reflections, analysis and experiences to fine-tune the content and approach of thisreader and to improve its future editions. We are really looking forward to these exchanges!


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Acronyms

AGM Annual General Meeting

ASCA accumulating savings and credit association

CSR corporate social responsibility

DWA Decent Work Agenda

EU European Union

FBES Fórum Brasileiro de Economia Solidária (Brazilian Forum for Solidarity Economy)

ILC International Labour Conference

ILO International Labour Office

LDCs local development centres

NGO non-governmental organization

NPO non-profit organization

ROSCA rotating savings and credit association

SEE solidarity economy enterprise

SENAES Secretaria Nacional de Economia Solidária (National Secretariat for Solidarity Economy)

SSE social and solidarity economy

SSEOs social and solidarity economy enterprises and organizations


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Contents

Acknowledgments ........................................................................ iii

Foreword ....................................................................................... iv

Introduction .................................................................................. vi

Acronyms ..................................................................................... vii

Chapter 1: Understanding the social and solidarity economy......1

1.1 Introduction ...............................................................................................................1

1.2 Mapping the SSE .....................................................................................................1

1.3 Common features of SSE organizations..................................................................5

1.4 Related concepts ....................................................................................................10

1.5 Comparative advantages of the SSE ....................................................................12

1.6 Key findings ............................................................................................................15

Chapter 2: Governance and management of SSEOs...................17

2.1 Introduction .............................................................................................................17

2.2 Governance and management of SSEOs..............................................................17

2.3 Managing resources in SSEOs...............................................................................25

2.4 Financing mechanisms for SSEOs.........................................................................28

2.5 Towards efficient management of SSEOs.............................................................29

2.6 Key findings.............................................................................................................30

Chapter 3: Policy framework for developing the SSE .................35

3.1 Introduction .............................................................................................................35

3.2 Public policies for the SSE .....................................................................................35

3.3 Constructed from the bottom up ...........................................................................39

3.4 Transverse actions..................................................................................................40

3.5 Possibilities of “emancipation”?.............................................................................41

3.6 The SSE in selected countries................................................................................42

3.7 Key findings.............................................................................................................49

Further reading .................................................................................................................50


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Chapter 4: Building the SSE through partnerships and

networking ................................................................53

4.1 Introduction .............................................................................................................53

4.2 The importance of partnerships and networks ....................................................53

4.3 Forms of collaboration ...........................................................................................56

4.4 Key stakeholders ....................................................................................................57

4.5 Different types of networks and partnerships .......................................................62

4.6 Networks’ roles and functions in supporting the SSE ..........................................63

4.7 Building an action plan ...........................................................................................66

4.8 International structures of the SSE ........................................................................68

4.9 Key findings.............................................................................................................69

Chapter 5: Contributions of the SSE to the ILO Decent Work

Agenda.......................................................................77

5.1 Introduction ............................................................................................................77

5.2 Promoting and realizing labour standards and rights at work .............................78

5.3 Securing decent employment and income ...........................................................80

5.4 Enhancing and broadening social protection .......................................................84

5.5 Strengthening and extending social dialogue.......................................................87

5.6 Key findings ............................................................................................................88

Bibliography................................................................................. 89


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Chapter 1: Understanding thesocial and solidarity economy

1.1 Introduction

This chapter aims to explain the meaning and natureof the social and solidarity economy (SSE). The SSEis all around us and refers to familiar realities foreveryone in the world: we are all members of atleast one association, the vegetables we buy and eatare often produced or traded by people organized incooperatives, many of us have bank accounts incooperative or mutual banks. In various African,European and Latin American countries, healthinsurance is provided by mutual healthorganizations. We all have heard about famoussocial entrepreneurs like Mohamad Yunus whoreceived the Nobel Peace Prize in 2006.

1.2 Mapping the SSE

The SSE refers to specific forms of enterprises andorganizations. Cooperatives, mutual benefitsocieties, associations and social enterprises are themost common types but they are not the only ones.It is a dynamic and evolving group of actors that allpromote and run economic organizations that arepeople-centred.1

1.2.1 Cooperatives

Formalized by the Rochdale Society of EquitablePioneers (Manchester, England, 1844), thecooperative enterprise spread rapidly and is nowfound all over the world. A cooperative is an“autonomous organization of persons unitedvoluntarily to meet their common economic, social,cultural needs and aspirations through a jointlyowned and democratically controlled enterprise”(ICA 1995; ILO 2002 Promotion of CooperativesRecommendation 193, Section I, Paragraph 2). Notall cooperatives are legally registered; this

organizational form is often chosen by groups ofproducers or consumers without being legallyrecognized as a cooperative. Cooperativeenterprises are found in virtually all branches ofactivity, such as agricultural cooperatives, insurancecooperatives, savings and credit cooperatives,distribution cooperatives, workers cooperatives,housing cooperatives, health cooperatives andconsumers cooperatives.

The history of cooperatives in Africa, in formercommunist countries or during some SouthAmerican dictatorial regimes, for instance, has beeneventful, due in particular to the fact that they werehighly exploited by States and that their autonomyand the voluntary involvement of their memberswere thus undermined. This economic structure isnow being increasingly and frequently chosen bypeople who want to collectively run an organization.A study (Pollet & Develtere, ILO-COOP Africa, 2009)shows that the number of cooperatives is increasingagain in several African countries: 7 per cent ofAfricans indeed belong to one or severalcooperatives (Develtere, Pollet & Wanyama, 2008).

A similar revival of cooperatives is being observedall over the world. The Latin American continent isconsidered by the International Cooperative Allianceas the “fastest growing” region in terms of newcooperatives and membership (ICA RegionalConference, 2009). These phenomena are notablebecause of the recent crisis that questions thepredominant economic and financial system.Various studies also show that the cooperativesector has been particularly resilient during therecent financial and economic crisis, which began in2008 (Birchall & Ketilson, 2009).


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1 Some parts of this chapter are adapted from Fonteneau & Develtere (2009).

Box 1.1: The International

Cooperative Alliance

The International Cooperative Alliance wasfounded in London in 1895. It currently has 223members that operate in all sectors of activity,particularly in agriculture, insurance, banking,consumers, housing, industry, fisheries, healthand tourism, with a total membership of some800 million people throughout the world. TheMondragón Corporation in the Spanish Basqueregion is a well-known example of aterritory-embedded enterprise. In the 1950s, thelocal population started work on a trulyindustrial complex in order to rebuild theregional economy which had been destroyedby the Civil War and the Second World War.Mondragón has now become an InternationalCooperative Group employing more than92,000 people, mostly in industry and retailsectors (Mondragon CC, 2010). In the UnitedKingdom, the cooperative group includes about75,000 employees and spends many resourceson supporting new cooperatives andcommunity initiatives.

In recognition of the potential of cooperatives toprevent and reduce poverty and to provideemployment opportunities, the General Assembly ofthe United Nations has declared that 2012 will be theInternational Year of the Cooperatives in order to“encourage all Member States, as well as the UnitedNations and all other relevant stakeholders, to takeadvantage of the International Year of Cooperativesas a way of promoting cooperatives and raisingawareness of their contribution to social andeconomic development” (UN ResolutionA/RES/64/136, Operational Paragraph 3).

1.2.2 Mutual benefit societies

Organizations for mutual aid have existed for a verylong time just about everywhere. Mutual benefitsocieties are organizations whose objective isessentially to provide social services for theirindividual members and their dependants. Thesesocieties – whether formal or informal – meet the

need of communities to organize collective socialrelief themselves by sharing a wide variety of risks:health care, medicines, illness (such as fromsickness or accidents), material support forbereaved families, repatriation of a body,expenditures incurred in rituals (such as burialsocieties), poor harvests, poor fishing seasons, etc.Mutual benefit societies provide services through amechanism where risks are shared and resourcesare pooled. The main differences between these andclassical insurance companies is that mutual benefitsocieties are not-for-profit and they do not selecttheir members nor calculate members’ premiums onthe basis of their individual risks.

Many mutual benefit structures operate in the socialprotection sector. The Association Internationale de

la Mutualité (AIM) was established in the 1950s. Itunites 40 federations or associations of autonomousmutual benefit societies in health and socialprotection in 26 countries across the world. The AIMaffiliates operate according to the principles ofsolidarity and non-profit, providing coverage formore than 170 million people throughout the world.In the insurance sector, the InternationalCooperatives and Mutual Insurance Federation(ICMIF) represents the interests of both cooperativesand mutual benefit organizations. The ICMIF has acurrent membership of 212 affiliates in 73 countries.

Some labour force rotation schemes or informalrotating savings and credit associations (also knownas tontines in some parts of the world) can beassociated with the mutual and benefit societies inthe sense that they combine societal developmentand social interaction with economic or financialfunctions (labour force or savings and credit), wherethe participants decide on the conditions and rules.The service provided is part of a social relationshipwhich creates and resolves reciprocal obligationsand shared interests (Servet, 2006).

1.2.3 Associations and community-basedorganizations

Freedom of association is a recognized human right,but its practice depends on how it is safeguarded innational jurisdictions and on the acceptance andsupport of such undertakings. In practice, the SSE


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may be seen as aframework torealize differentforms of individualfreedom ofassociation as itaims to producegoods or serviceson a continuousbasis withoutbeing primarilyfocused on profit(Develtere &Defourny, 2009).The countlessnumbers ofassociations,voluntaryorganizations,community-basedorganizations,non-profit organizations and economic interestgroups form a heterogeneous group and operate inevery possible field. Whether “modern” or“community-based” or “traditional”, they all operateon the same basis (e.g. negotiated rules andreciprocity guaranteed in particular by socialcontrol) and pursue similar aims (e.g. economicutility or creating and maintaining social bonds). Oneof the objectives of associations built up aroundcommunity links in the SSE has been, and still is, toreduce the gap between individuals and theauthorities. Associations have many advantages; forexample, their establishment and operatingmethods are relatively flexible and they provide abasis for new forms of sociability (particularly inurban areas).

Considerable efforts have been made over the lastten years to increase our knowledge ofassociations,2 and particularly of the non-profitsector which, as suggested by a vast researchprogramme coordinated by Johns HopkinsUniversity, accounts for most of the associationcomponent of the social economy and part of the

mutual aid component that has legal status. Thelatest findings of this programme (Salamon et al.,2003) reveal that among the 35 countries examinedmost closely by the study, the non-profit sectoraccounts for about 39.5 million full-time workers,including 21.8 million paid workers and 12.6 millionvolunteers (Defourny & Develtere, 2009).

1.2.4 Social enterprises

Social entrepreneurship is a relatively recentconcept and a strong emerging phenomenon. InEurope and in North America, the phenomenonemerged in the crisis context during the late 1970sas a response to unmet social needs and the limitsof traditional social and employment policies totackle social exclusion (Nyssens, 2006). Thisphenomenon grew from the will of some voluntaryassociations to create jobs for people excluded fromthe traditional labour market and from individualentrepreneurs who wanted to run businesses butwith pronounced social purposes.


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Portrait of a Bolivian villager.

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2 The first studies to identify the contours of the social economy from an international comparative perspective, and to quantify its threecomponents, were carried out by a group of researchers from 11 European and North American countries. These studies came underthe patronage of the International Centre of Research and Information on the Public and Cooperative Economy (CIRIEC) (Defourny &Monzon Campos, 1992).

Social enterprises refer to a variety of situations.Different definitions are proposed. According toThompson & Doherty (2006), social enterprises are“organizations seeking business solutions to socialproblems”. For the International Labour Office (ILO)SETYSA project in South Africa, social enterprisesare defined as:

� having a primary social purpose, which is clearlystated as its core objective;

� using a financially sustainable business model,with a realistic prospect of generating sufficientincome to exceed costs and of having asignificant proportion of its income from earnings(as opposed to grants or donations);

� being accountable to its stakeholders, with anappropriate mechanism to ensure accountabilityto beneficiaries and to measure and demonstrateits social impact.

Social enterprises differ from the other typesdescribed above because they are not necessarilycollectively owned. They also differ fromprofit-making enterprises because they do not solelyaim to make financial profits but also seek togenerate social benefits by virtue of the type ofproducts or services that are marketed, the profile ofthe workers involved (e.g. low-skilled workers orworkers employed under vocational integrationschemes) and the allocation of the financial profitsthat are generated.

Social entrepreneurship stressesthat the entrepreneurial mindsetand behaviour can be manifestedanywhere (Dees, 1998) and thateconomic activity combinesprofitability and social change. Inthat sense, they are often hybridorganizations since they are doingbusiness while promoting socialvalues. They also are oftencharacterized by amulti-stakeholder governance andownership (i.e. gathering users,founders, funders, localauthorities, etc.) that somehowguarantee the social purpose ofthe enterprise. Social enterprises

are also characterized by an economic democracy.This economic democracy is often translated intolimits in voting power and limits in return on capitalshares (i.e. cap on distribution of profit and assetlocks) (Nyssens, 2006).

Since the 1990s, social enterprises are recognizedlegal forms in various countries. Some of these legalframeworks are clearly inspired by the cooperativetype (e.g. the pioneer Italian law on Cooperative

Sociali in 1991). Other legal frameworks weredeveloped, such as the Community InterestCompany in the United Kingdom and the Société à

finalité sociale in Belgium. In Italy, the Consorzio

Gino Mattarelli (CGM) gathers 1,100 socialcooperatives and 75 local consortia.

Social entrepreneurship is promoted by manynetworks and organizations such as the AshokaNetwork and the Schwab Foundation, which havebeen launching major initiatives for several years toidentify and encourage social entrepreneurs andsocial enterprises. Their approach of socialenterprises is, to some extent, more open than otherapproaches (e.g the European approaches) or legalframeworks since they mostly stress the role ofindividual social entrepreneurs and their socialpurpose without other criteria related to thecollective ownership or the distribution of surpluses


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that are particularly important from a social andsolidarity perspective.

1.2.5 Foundations

Foundations may be qualified partly as componentsof the SSE; however, not all foundations operate insuch a spirit.

Some countries distinguish public benefit orcharitable foundations from private foundations(Gijselinckx & Develtere, 2006). Public benefit orcharitable foundations pursue non-profit,public-value goals and thus serve communityinterests. Private foundations also pursue non-profitgoals, although they can be of a private naturewhich may or may not fall within the realm of theSSE. Furthermore, some authors consider activitiesthat generate resources which are partially investedin philanthropic aims to be contradictory to a certainextent (these are often activities carried out by majormultinational enterprises). The absence ofparticipatory governance of most foundations andthe classical criticisms levelled at this sector(including the presumed motives behind thecreation of certain foundations such as marketing,tax evasion and vanity) (Prewitt, 2006) could providearguments against affiliating foundations to thesocial economy.

Yet, some foundations are considered to be part ofthe SSE. An example is the European FoundationCentre (based in Brussels), whose mission is tostrengthen the independent funding of philanthropicorganizations in Europe. It unites over 230organizations in 40 countries and explicitly includesits mission in the social economy. Another exampleis Social Economy Europe, a European network ofcooperatives, mutual societies, associations andfoundations. Its mission is to strengthen political andlegal recognition of the social economy at theEuropean level, and it explicitly includes foundationsin its understanding of the social economy.

The affiliation of foundations to the social economyremains an open debate and there is probably nodefinitive answer because of the variety andsometimes contradictory nature of the different legalforms of foundations. To distinguish the ones

belonging to the social economy from the others,we should refer to the common features of thesocial and solidarity organizations and enterprises,especially the democratic nature of theirdecision-making process.

1.3 Common features of SSEorganizations

1.3.1 Objectives

Despite the diverse organizational forms, social andsolidarity economy organizations and enterprises(SSEOs) have common features that distinguishthem from public and private enterprises andorganizations. Academics, practitioners andpolicy-makers have relied on these features toidentify these organizations and enterprises aroundthe world.

The main distinguishing feature of a social andsolidarity organization is that it produces goods andservices. This feature is particularly important todifferentiate some associations that, for example,may only gather some friends to play football from anon-profit sport club that is providing sport lessonsand training facilities to the public.

Some definitions stress the fact that the purpose ofthe social economy is more about producing goodsand services than maximizing profits. The slogan ofthe World Council of Credit Unions sums it up in anutshell: “not-for-profit, not for charity, but forservice”. Profits are essential for the sustainabilityand development of organizations and enterprises.But in SSEOs, benefits are not the primary goal, andtheir use or distribution must comply with specificrules inherent in the legal structures concernedand/or negotiated collectively by the organizations’members. Of course, there is nothing to preventSSEOs from generating surpluses. On the contrary,surpluses are necessary for the viability of theseeconomic enterprises and organizations. But thedifferences between SSEOs and for-profit-makingenterprises include that this objective is secondary;the way in which these profits or surpluses areproduced (“near cost”); and the rules forredistributing them among the people who have


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helped to generate them by contributing labour,capital or any other resources.

Since the economies of most countries operateaccording to market principles, goods and servicessupplied by SSEOs are traded in those markets andcompete with the goods, products and knowledgesupplied by other private operators. However, incertain cases, (particularly with social services),public service rules serve as a reference. The socialeconomy may also have to create special markets –such as the fair trade market – where marketeconomy principles (particularly competition) arecombined with certain features (e.g positiveexternalities for a group of producers orenvironmental protection).

The fact that the SSE combines social and economicobjectives is considered paradoxical by someeconomic actors. Some public authorities also find itdifficult to position SSEOs in public policies that areoften elaborated in silos more than incomprehensive approaches. Including the social,

financial and environmental dimensions ofsustainability is indeed a challenge for SSEOs.

1.3.2 Whose economy?

The social economy is sometimes confused with aneconomy of the poor or “for the poor and othervulnerable categories,” such as women, disabledpersons, low-skilled workers, migrants or youngworkers. This is certainly not a criterion fordistinguishing the social economy from other formsof economy. The social economy is not, bydefinition, an economy of the poorest or mostvulnerable. It is, in fact, a choice that is made.People can choose to combine (economic, social,environmental or other) objectives, not maximizethe financial return on investment and establishparticipatory governance.

However, this perception of the social economy isnot altogether incorrect. By virtue of the solidarityprinciples and mechanisms involved, enterprisesand organizations of social economy are often theonly forms accessible to people who cannot


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Participation

Social andSolidarityEconomy

Solidarity

VoluntaryInvolvement

Autonomy

Economic andSocial Function

Collectivedimension

Figure 1.1: Combined social and economic objectives

mobilize sufficient capital or other resources tolaunch and develop economic activities. And, asJacques Defourny (1992) has stated so aptly,necessity is often a condition which prompts theemergence of social economy initiatives. Given thespecific social purpose of this type of economy, itnaturally tends to attract groups, users or clientswho do not have access to employment or certaingoods, products and knowledge, or whose access tothem is limited.

In this way, the social economy develops as muchby aspiration as by necessity (Lévesque, 2003). It is,however, in the interests of social economyorganizations to ensure a mix in their membershipas long as they guarantee that their members havecommon interests. For it does not make sense for amutual health society, for example, to unitemembers whose profiles or economic activitieswould make them more vulnerable regarding healthcare. This would amount to establishing solidaritymechanisms among the poor or the vulnerable(distributive solidarity). On the contrary, it is verymuch in the interests of social economyorganizations to have members from differenteconomic and social categories in order to ensuregreater economic viability and to provide a basis forredistributive solidarity. Organizations very oftenhave to find a balance among economic interests,this solidarity mechanism and a mutually generatingand reinforcing mechanism of social cohesion,which is essential to collective action.

1.3.3 Common operating principles

Participation

The members, users or beneficiaries of SSEOs havethe opportunity to be either the owners of theorganization or to actively take part in thedecision-making process. By granting themembership or the beneficiaries/users the capacity toequitably take part in decisions, these organizationsestablish participative operating methods.

This participation can exist in diverse forms. Incooperatives, mutual benefit societies andassociations, the principle is, in theory: “one person,

one vote”. This principle aims to ensure that thevarious contributions of individual members (e.g.work, contribution in kind, money) are given equalrecognition and that none of these forms of input(such as money) is valued any higher than others orgiven any more weight in the organization and in thedecisions taken. In some SSEOs, thedecision-making process may be different (e.g.decisions made by consensus). The degree ofparticipation can thus vary widely from one type ofenterprise or organization to another, even amongorganizations that share the same legal status. SomeSSEOs will thus be more “democratic” than others.The forms of participation can be even more variedwhen additional stakeholders are involved (e.g.members, beneficiaries, users) or as a result of theparticularities of some sectors in which SSEOs areoperating (particularly in terms of, among others,efficiency, speed or user/client profile).

The possibility of control and of imposing sanctions,which is inseparable from participation, guaranteesthat the decisions that are taken are in line with theoriginally agreed goals and spirit of the organization.The participatory nature of decision-makingdistinguishes SSEOs from private for-profit-makingenterprises or public enterprises, in which sanctionsare imposed by the market or by vote. In the finalanalysis, these operating mechanisms andprocedures guarantee the user, member orbeneficiary confidence in the social economyorganization and its leaders, whether they areelected (as is the case in cooperatives) or not (as isthe case in social enterprises).

Solidarity and innovation

The operating methods of social economyorganizations are often described as being based onsolidarity. In fact, some authors prefer to use theterm “solidarity economy” precisely to emphasizethis dimension. Operating methods based on thesolidarity principle aim to include rather thanexclude; their goals are not limited to accumulatingcapital or generating profits, but include usingresources to achieve objectives that will benefit theinitiators as well as the workers andusers/beneficiaries involved.


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It is this solidarity aspect which also explains whyflexibility and innovation are often features of theseorganizations. The fundamental aim is to findsolutions and to meet needs that are constantlychanging and evolving. The close links that theseorganizations maintain with the users/beneficiaries(whether they are members of the organization ornot) without confining themselves to “marketsignals” means that they focus constantly onadapting in order to continue to fulfil this function.

Voluntary involvement and autonomy

A distinctive feature of cooperatives, mutual benefitsocieties and other associations is that people areunder no obligation to become involved; they do sofreely on a voluntary basis. In some countries or underspecific periods, social and solidarity organizations arenot automatically associated with the concept ofvoluntary membership or collective action becausethese types of organizations have been used bygovernments or colonial authorities to organize thepopulation in a compulsory way for production orpolitical purposes.

Collective dimension

The emergence of SSEOs results from the will ofpeople and/or groups to join forces in order to meettheir own needs or those of others. This is whysome authors (Defourny & Develtere, 1999) say thatsocial cohesion and collective identity are virtuallysystematically associated with the social economy.Traditionally, this collective factor distinguishes

SSEOs from private for-profit-making enterprises,where the entrepreneur (conceived as an individual)is presented as the driving force behind theinitiative.

The systematically collective dimension of SSEOscan be called into question. For cooperatives,mutual benefit societies and associations, theconditions in which they emerge (i.e. collectiveneeds or commonly shared-needs) and theiroperating methods reflect a collective dimension,particularly in terms of pooling resources,decision-making methods and benefit distribution.However, in actual practice, this collectivedimension does not exist to the same extent in allenterprises and organizations. It may be present atcertain moments in the life of an organization (at thebeginning, in particular) and then deteriorate(particularly when the organization becomesprofessionalized), although the organization neednot necessarily lose sight of its initial objectives orphilosophy. As previously mentioned, the collectivedimension also can be questioned for particularenterprises and organizations, such as socialenterprises or foundations.

This collective dimension sometimes conceals akey factor in the success of social economyorganizations – the leadership of their founders orleaders. This leadership is conceived as anexpression of legitimacy but also as a factor inenabling access to internal and external resources(e.g. confidence, commitment, equity capital,voluntary involvement) which are more difficult tomobilize by other means. Leadership is notintrinsically antinomical to the collective dimensionof an organization. But, in practice, leadership thatis too strong can lead to less collective forms ofgovernance. In fact, this is how the concept ofsocial enterprises or social entrepreneurs emerged.These social enterprises differ from the classicalstructures of the social economy in that theyemphasize a feature that is typical of privateprofit-making enterprises – the individualentrepreneur, with his or her dynamism, personalcommitment and innovative practices (Defourny &Nyssens, 2009).


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Passepartout - a small local network of responsibletourism in Umbria Italy

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1.3.4 Resources

Resources are not, by definition, a criterion fordistinguishing between the social economy and otherforms of economy, but they provide a basis fordetermining where that economy stands in relation toothers and identifying the issues in using variousresources. The resources issue also raises thequestion of the autonomy of social economyorganizations and indeed of any private initiative.

It must be stated first that there is no single model torepresent the resources of the social economy. Thesocial economy uses public resources andresources generated by trade and the market, aswell as voluntary involvement and work – a resourceto which few other forms of the economy haveaccess.

SSEOs draw on resources that are provided in oneway or another by their initiators and members. In acooperative, these resources take the form ofmembers’ shares. In an association or mutual benefitsociety, they take the form of members’subscriptions. In social enterprises, this incomewould be in contributions to the capital or assets inkind. In foundations, endowments or bequests enablethe organizations to achieve their goals.

It is generally said that autonomy is the factor whichdistinguishes the social economy from the publiceconomy. Yet the social economy uses publicresources in the form of subsidies from nationalgovernments and in official development assistancefor countries in the South. The fact that publicresources are provided in this way can indicate thatpublic authorities recognize the existence and


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Box 1.2: Corporate social responsibility and the SSE

The origin of the corporate social responsibility concept is rooted in the entrepreneurial philanthropydeveloped in the nineteenth century, but which was particularly promoted after the Second World War.Corporate social responsibility (CSR) is a way “in which enterprises give consideration to the impact oftheir operations on society and affirm their principles and values both in their own internal methods andprocesses and in their interaction with others. CSR is a voluntary, enterprise-driven initiative and refers toactivities that are considered to exceed compliance with the law” (ILO Governing Body, 2006).

CSR programmes can be translated into a variety of activities and domains, such as donations andsupport to external organizations, social accounting, environmental social impact assessment, internalhuman resources management and risk management.

Is there a link between CSR and the SSE? If yes, what could it be?

So far, CSR has been a trend within some conventional for-profit enterprises as a way of redistributingparts of their surplus for social or environmental issues; improving their public image; compensating ormitigating some negative impacts generated by their activities; or improve the well-being, motivation andproductivity of their employees. As far as it does not profoundly change an organization’s functioning andfinality, it does not transform these enterprises into SSEOs. Yet, the link between CSR and the SSE can beestablished in various ways, such as when an enterprise promotes the SSE by supporting SSEOs or whena CSR enterprise creates a public benefit and participatorily managed foundation as a redistributing tool.Partnerships between SSEOs and private commercial enterprises are more frequent in the fair tradesector (e.g joint partnerships in procurement contracts and fair trade labelling related tocommercialization practices) (Huybrechts, Mertens & Xhaufflair).

The link can also be made in the other direction. Some SSEOs, especially the oldest and most establishedones (i.e in the finance and insurance sector), can also elaborate CSR policy that would go beyond theirprimary objective and would improve or complement their internal operations toward staff or members. Itwas in this spirit that the Mondragon Group created the Mukundide Foundation in 1999 to promotecommunity and cooperative production initiatives for sustainable development in developing countries.

function of the social economy (among other formsof economy) or it can amount to a form of“sub-contracting” or partnership in theimplementation of public policies. One generallyrefers to the “non-market” economy (where the priceof a product or service does not reflect the costsincurred) whenever at least 50 per cent of productioncosts are not covered by market-generatedresources. The resources of associations in thecountries of the South come mainly frominternational aid, either because the associationwants to make its goods and services available inorder to guarantee accessibility, or because the targetgroup or members cannot pay, or because theorganization is unable to generate adequateresources through subscriptions, sales, etc.

Since SSEOs have an economic mission bydefinition, many of them obtain a fairly large share oftheir resources by selling goods and/or providingservices, in which case they often compete with otherprivate operators. In competition (sometimes over thesame products or services), the social economysometimes may be at a disadvantage, since it can bemore difficult for that economy to propose equivalentalternatives in terms of price (since it lacks economiesof scale), responsiveness (since decision-making isparticipatory) or quality. One of the strategies of theSSE is to emphasize its comparative advantage fromthe microeconomic point of view (i.e. combinedobjectives, innovation, flexibility), as well as inmacroeconomic and societal terms.

Voluntary work is a resource to which few privateprofit-making or public organizations have access.SSEOs are able to mobilize this resource becausevoluntary workers subscribe to the principles of asocial economy organization, consider its aims to berelevant and its actions legitimate, and subscribe to theparticipation and control that can take place in theorganization’s activities and decision-making bodies.Voluntary work is a special resource and a tremendousasset for social economy organizations. However,unless there is a balance among different types ofresources, volunteerism can constitute an obstacle tothe organizations’ development if professionalization,adequate skills or sufficient availability are not availablefrom the voluntary workers.

1.4 Related concepts

In this reader, we use the term “social and solidarityeconomy organizations and enterprises”. This termis not the only one used to encompass the realitieswe describe. Social economy, solidarity economy,popular economy and non-profit organizations arerelated concepts. They all have certain geographicorigins and other theoretical backgrounds andemphasize particular dimensions of this economicform. By briefly reviewing some of these concepts,we want to stress that despite their commonfeatures, SSEOs can differ in organizational formsand approaches.

1.4.1 Social economy

The term “social economy” is often presented ashaving been used for the first time in the latenineteenth century to describe the voluntary andself-help associations established by workers to facethe consequences of the extension of industrialcapitalism. The term was rediscovered in the 1970swhen the French cooperative, mutualist andassociative movements rediscovered their commonfeatures and increased their institutional recognition(Defourny & Develtere, 2009). Social economy isclassically associated with cooperatives, mutualbenefit organizations and associations. Theseorganizations share the goal of gathering autonomousorganizations that aim to place service to theirmembers or the community ahead of profit and thatincorporate democratic decision-making processesdespite some differences in terms of benefitdistribution (i.e. cooperatives allow distribution ofsurpluses in cash to their members while associationsand mutual benefit associations prohibit it).

In some parts of the world (e.g. Belgium, France,Québec and Spain), social economy benefits frompolitical and economic recognition among ministriesand administration and supporting public policies. Inthese regions, social economy encompasses diverseorganizations, including very established, largebanks, insurance or agricultural organizations and,more recently, smaller initiatives supported or notby public policies.


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1.4.2 Economie solidaire or Economia solidaria

“Solidarity economy” is a term especially used inFrance, Latin America and Québec. Clearly, the termstresses solidarity as the main feature of this kind ofeconomy as opposed to the conventional capitalisticeconomy. In Latin America, this term is used tocover a broad range of initiatives. In other regions(France and Québec), this term has been promotedto make the distinction between establishedcomponents of the social economy (i.e.cooperatives, associations, mutual benefit societies)and newer solidarity mechanisms and organizations.

This distinction does not aim to only differentiateolder from newer initiatives. It stresses the fact thatsome older, large and established organizations(especially in the banking and insurance sectors) donot function anymore according to their theoreticalcommon features because their linkages are tooclose with the conventional capitalistic economy(e.g. due to fusions and merging). Above all, thesupporters of the solidarity economy approach wantto shed light on innovative, more participatory andoften smaller initiatives. These initiatives are oftencreated to respond to contemporary societal and

social problems, such as child and elder care,environmental issues, local exchange tradingsystems and sustainable agriculture. These solidarityeconomy organizations or networks are also moreembedded at the very local level and based on areciprocity mechanism. They also rely on hybridresources: monetary and non-monetary,market-based and non-market based, paid jobs andvolunteering (Laville, 2007).

1.4.3 Popular economy

The term “popular economy” is rooted in LatinAmerica and has been conceptualized byresearchers such as Luis Razeto (Chile) or Jose-LuisCorragio (Argentina). Some Africannon-governmental organizations (NGOs) (e.g. ENDAin Senegal) also adopted this terminology.

As the term clearly states, this economy is seen asbeing developed by the popular class (i.e. the mostvulnerable) and their organisaciones de base toaddress subsistence economic and social problems.The groups often share the same living situation,religious or political communities and intend to solveday-to-day problems through collective awakening


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Woman working in an orchid farm nursery, Thailand.

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processes and practical solutions. From a conceptualpoint of view, the emphasis is on the internalrationale of an economy self-managed by theworkers. These organizations often have to rely ontheir non-monetary resources: labour force,organizational and mobilization capacity, imagination,creativity. In addition to the classic resources oflabour and capital, Razeto suggests adding a thirdfactor – a Factor C that stands for collaboration orcooperation – that popular organizations may rely onin addition to or instead of capital.

The popular economy is also correlated with astrong political agenda because this economy isseen as being an economic and political modelwhich is an alternative to the prominent and – intheir views – exclusionary (neo) liberal economy.

1.4.4 Non-profit organizations

The Anglo-American non-profit approach (see e.g.Salamon & Anheier, 1999) describes organizationsthat belong to neither the private for-profit sector northe public sector. It encompasses a more restrictivegroup of organizations than the concepts previouslydescribed since it excludes any organization thatpractices the redistribution of surpluses. In thisapproach, the “constraint of the non-distribution ofprofits” actually excludes cooperatives, classing themwith private profit-making organizations rather thanwith organizations where profits are not the primarygoal. The advocates of the social economy, however,consider it perfectly feasible to class cooperativeswith mutual benefit societies and associations, sincethey share the same spirit despite the fact that theyoperate on different principles (Defourny andDeveltere, 2009).

In the United States and the United Kingdom, theexclusion of for-profit organizations such ascooperatives can be explained by the origins of thenon-profit approach, where many associations(originally self-help ones) were created to addressthe problems related to building a society,urbanization, immigration or economic issues in aspace not occupied by the State or by for-profitcompanies. One could say that the non-profit sectorcorresponds to the associative component of thesocial economy.

1.4.5 Third sector

In some countries, the term “third sector” is used atthe policy and practitioner level as a synonym forthe non-profit sector or the social economy sector.Although this term does not explain well theconcept of SSEOs, it gives added value to the socialeconomy sector by placing it next to the publicsector and private sector in discourse.

1.5 Comparative advantagesof the SSE

The SSE is characterized by diverse organizationalforms, domains of activities, approaches,geographic locations and even terminologies. Thisvariety often leads to difficulty in gainingrecognition, not only for some SSEOs themselvesbut also for public and private actors at the local,national and international level. Yet, the SSEpresents several comparative advantages to addresssocial, societal, economic and political challenges allover the world.


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Swedish people from COOMPANION in LE MAT Verona.

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1.5.1 Social cohesion

Because our societies are constantly changing, socialcohesion among people and communities is often atstake. Social cohesion programmes are establishedeverywhere to create or maintain linkages and asense of community among people sharing the sameliving areas, common facilities or destiny.

Through all of its operating principles, the SSE isbased on social cohesion and contributes to social

cohesion. As Jacques Defourny (1992) explains,social cohesion – or the recognition of a collectiveidentity – is one of the factors that make the SSE true.It is indeed because of this collective feeling thatgroups of people decide to address social andeconomic issues through social and solidarityorganizations. In addition, the SSE generates socialcohesion through its functioning principles, its socialpurposes intended to benefit the members and thecommunity and its impact at the local level.


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Box 1.3: The informal economy and the SSE

The informal economy is a fact of life that cannot be ignored in any economy. In some African countries,the informal economy generates incomes and “jobs” for more than 80 per cent of the urban population.How does the informal economy stand in relation to the social economy?

The ILO defines the informal economy as a set of activities carried out by workers and economic unitswho or which (de jure or de facto) are not covered, or are inadequately covered, by formal arrangements.Their activities are not covered by legislation, which means that laws are not applied or that lawsdiscourage compliance because they are inadequate or involve ponderous procedures or excessive costs.

The primary feature of the informal economy is the tremendous vulnerability and insecurity of the peopleinvolved – whether they be employees, self-employed workers or employers – because of the lack of protection,rights and representation. In many countries, the informal economy overlaps with the private economic sector toa large extent, except for criminal or illegal activities, but cannot be included in official public statistics.

The informal economy may be different from the social economy in the legal sphere (Fonteneau, Nyssens& Fall, 1999). It is quite possible for an organization that operates according to social economy principlesto have informal status because of the inadequacy of existing statutory instruments or difficulty informally meeting those criteria. The informal economy and the social economy are more similar in thecircumstances in which they emerge, the way in which they operate and the aims they pursue.

In both the social and the informal economy, necessity often prompts people to initiate their activities. Peopleand organizations in these economies also operate in the same market context – a context which shapes theproducts and services and ensures that they are very accessible in terms of proximity and price. The operatingmethods of many of these activities do not resemble the characteristics of profit-making enterprises. On thecontrary, they can be associated with an economy that combines relational concerns (Hyden [1988] refers tothe economy of affection) with market practices. Also, while social economy organizations explicitly pursueboth economic and social objectives, economic units in the informal economy may do so to a certain extent,although this is not explicitly or consciously expressed by the operators. To them, pursuing both objectives ismore simply logical, since, in the context in which they develop, those organizations pursue strategies ofsustainability, social cohesion, etc.

Basically, a distinction or connection can only be made between a social economy organization and aninformal economy organization by observing the principles that govern the conduct of these economicunits in spirit or practice. That is the basis on which one can judge whether the aims pursued by a unit inthe informal economy are more akin to those of the social economy or those of a capitalist enterprise.This way of looking at informal economy units could also offer opportunities to help the formalization ofsome units under social and solidarity organizational forms.

1.5.2 Empowerment

Empowerment is an important factor that allowsindividuals and communities to have a voice and berepresented. Empowerment can be built through avariety of processes and mechanisms. There is no

doubt that participation and membership in SSEOscontribute to an empowerment process. Membersand users gain empowerment through their activeinvolvement in the participatory decision- makingprocess within the organization and outside theorganizations when they bargain with external


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Box 1.4: Social movements, civil society and the SSE

What do peasants’ organizations, mutual health societies, savings and credit unions, cooperatives,associations fighting HIV/AIDS, social enterprises, certain foundations, associations operating inreforestation or programmes for integrating the innumerable jobless young graduates in African capitalshave in common?

They all confine their activities to producing goods or services (which may or may not be supplied byother operators), and see their economic mission as achieving one of several objectives, such as:improving production conditions; making the services that are provided accessible to people whootherwise would not have access to them; or taking account of societal and environmental challenges. Afurther feature of these organizations is that they set landmarks in their operating principles, such asallowing control by members, workers or users; adjusting the rules for distributing and locating thesurpluses generated; finding a balance between generating profits (necessary for developing anyenterprise) and service to the members and/or community; ensuring a balance of power among thevarious stakeholders in decision-making, and so on. These concerns are certainly reminiscent of those ofworkers’ organizations and demonstrate the natural links that exist between the social economy and theworkers’ and farmers’ union movements.

Even where regulations provide a framework for these various components, the social economy is also amovement, since it aims to adjust and correct certain faults or trends. Forming a movement meansadopting a more forward-looking approach, looking ahead to future trends in order to safeguard againstrisks (generated by the market and by the State) and to prepare to make the necessary adjustments in thesector. If social economy organizations were isolated in their sectors of activity or grouped solely on thebasis of legal status, they would lose the advantage of sharing experiences and the visibility of aneconomic and social force that is supported by committed citizens.

Given the profile of the pioneers and the common features of these organizations, it is only logical that amore political approach would develop. These social economy movements have various concerns:combining economic and social objectives in societies where the economic and social sectors are oftenvery segmented (as can be seen by the jurisdictions of the ministries concerned) and are financed byresources which come from very different sources (taxes and/or national and international solidarity in thefirst case and the market in the second case); the defence of certain practices in market economies (suchas the non-profit nature of insurance or health care); the legitimacy and (legal and political) protection ofcertain forms of institution in a free market economy; or the detection of societal problems.

As a result, the social economy can take the form of social movements, which can be formal (i.e.platforms or federations), informal or ad hoc. Likewise, they can be the result of efforts to gatherorganizations together by sector, country, region, etc. Irrespective of the reasons for which they haveunited, these organizations are an economic, social and political force, and they have common concerns.Although, some of these movements are often fragile and far from global, organizations that can beaffiliated with the SSE are part of civil society in the regional, national or international political arena.

stakeholders. At the collective level, SSEOs alsocontribute to the empowerment process ofindividuals and communities by demonstrating thatall individuals can become active and productiveeconomic and social actors.

1.5.3 Recognition of a plural economy

There are diverse mechanisms that can achievesimilar objectives such as creating jobs, socialprotection, well-being, wealth, innovation, care, etc.Most societies are comprised of a plurality of publicand private actors which may be oriented towardsfor-profit or not-for-profit. Social protection is agood example of how different mechanismsprovided by different economic actors and based ondifferent reasoning could be articulated to achieve acommon objective, i.e. social protection for all. Inmany countries, these mechanisms coexist withoutlinkages between them, but they could bearticulated though a redistribution process (seeFigure 1.2) to ultimately provide what the ILO calls asocial protection floor.

In the broader perspective, taking the SSE intoaccount leads to recognizing a plural economycomprised of different types of economic exchanges(e.g. monetary and non-monetary, market andnon-market, public/private and for-profit/non-profit)and activities.

1.6 Key findings

� The SSE refers to specific forms of organizationsand enterprises. The most common types arecooperatives, mutual benefit societies,associations, community-based organizations,social enterprises and some foundations. TheSSE is indeed a dynamic and evolving group oforganizations.

� SSEOs share common features that distinguishthem from the public economy and from theconventional for-profit economy. They all aim topursue combined social and economic objectivesand they share specific operating principlesbased on participation, solidarity, innovation,voluntary involvement and collective ownership.

� The term social and solidarity economy is not theonly one used to encompass these realities.Social economy, solidarity economy, populareconomy and non-profit organizations are relatedconcepts. They all have certain geographicorigins and theoretical backgrounds andemphasize particular dimensions of thiseconomic form.

� SSEOs offer several comparative advantages toaddress social, societal, economic and politicalchallenges all over the world, including socialcohesion, empowerment and recognition of aplural economy.


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For-profit enterprises

FUNDING STAKEHOLDERS POPULATIONCOVERED

Publicentities SSEE

Bothformal andinformal

Invests inMicro-enterprise

State taxesnational regional)


Solidarity contributionfrom the formal social

Security and frominvolved SSEOs and

their members

Figure 1.2: Illustration of a plural economy: holistic approach of social protection

Chapter 2: Governance andmanagement of SSEOs

2.1 Introduction

Though SSEOs are heterogeneous, they operate onsimilar principles. To a large extent, the governanceand management of these organizations has beeninfluenced significantly by their collectivemembership and ownership. Driven primarily bysocial benefit motives as opposed to capitalaccumulation, these organizations are largely“people-centred”. Consequently, every member hasthe same right to participate in the enterprise anddespite the different organizational structures, all ofthese organizations endeavour to give members theopportunity to participate in their governance andmanagement.

The purpose of this chapter is to explain how SSEOsare governed and managed, paying attention to thenature of ownership and membership and theimplications for member participation. This shouldgive us insights into the strengths and weaknessesin the management of SSEOs and the possibilitiesfor improving efficiency in their operations.Considering that SSEOs use a business approach tosatisfy social needs and expectations, the chapterbegins by comparing their governance andmanagement with conventional capitalistenterprises.

2.2 Governance andmanagement of SSEOs

2.2.1 Defining governance and management

Though the concepts of governance andmanagement are sometimes used interchangeably,they carry slightly different meanings. Governancehas often been defined in the context of exercisingstate power (see Hyden and Court, 2002: 13-33;Olowu, 2002: 4; Hyden, 1992: 7), yet in reality theconcept applies to a much broader context of

human society. Rather than politicize the concept,we define governance here as the exercise ofinstitutional authority to determine the use ofresources in the conduct of a society’s affairs (WorldBank, 1991). This definition implies that governanceoccurs in societal organizations of all forms andsizes and in private, public, for-profit and non-profitorganizations. The rationale behind governance isnormally to ensure that an organization producesworthwhile results while avoiding undesirableoutcomes for the people concerned.

The concept of management has also attractedmany definitions in the literature. For instance, apopular definition in the microfinance literature isthat management is the process of getting thingsdone efficiently and effectively with and throughpeople (Churchill and Frankiewicz, 2006: 2). For ourpurposes, we define management as theorganization and coordination of the activities andefforts of people in accordance with prescribedpolicies to achieve desired goals (BusinessDictionary,http://www.businessdictionary.com/definition/management.html). As a process, managing involvesplanning, organizing, leading and supervisingpeople to perform the necessary tasks for achievingprescribed goals (Churchill and Frankiewicz, 2006:2-8). Clearly, management occurs in organizations ofall forms and sizes.

The basic distinction between these two concepts isthat whereas governance sets the framework forcarrying out organizational activities, managementdeals with the day-to-day implementation oforganizational activities as provided for in theframework. Thus, governance is broader thanmanagement because it provides the policies thatform the basis for the work of management. In thecontext of SSEOs, governance has to do withformulating policies that identify activities andmobilize resources to achieve the aspirations or


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goals of members and/or users; management dealswith actually performing activities to realize thegoals or aspirations of members and/or users. Box2.1 attempts to simplify this distinction.

Box 2.1: Governance vs.

management actions in

organizations

When a group of people deliberate and decideon the kind of activities that they will engage into achieve certaicipate in carrying out thechosen activities in order to realize a goal, theyare playing a management role.

The determination of who plays which of these tworoles in an organization is sometimes based on theownership and membership of the organization.Whereas owners and members would be expectedto act as the principals and play governance roles,non-members would be agents of the principals andwould play management roles. In some cases, thesize of the organization influences this issue: smallorganizations are more likely to combine these rolesthan large organizations.

The next section attempts to show how ownershipinfluences the separation of governance andmanagement functions in private enterprises andSSEOs.

2.2.2 Ownership and governance

Capitalist enterprises are business ventures that aimat earning profits from their activities for distributionto members. There are generally three forms ofownership in these enterprises: soleproprietorships, partnerships and corporations.Whereas a sole proprietorship is a business ownedby a single person, a partnership is a businessowned by at least more than one person.Corporations are legally constituted companies thatare owned by shareholders who buy companystocks or shares in the capital markets (Kim andNofsinger, 2007: 2).

Regardless of this distinction, the common practicein capitalist enterprises, with the exception of verysmall sole proprietorships, is the separation ofgovernance and management functions. Whereasthe owners play governance roles, management –consisting of executive staff employed by theowners – is in charge of the control function (Kimand Nofsinger, 2007: 3). Executive staff ranges frommanagers or executive directors throughaccountants and auditors to clerks, secretaries andoffice assistants. Thus, in most of these enterprises,those who perform governance functions aredistinct from those who play management functions.Whereas owners are the principals and confinethemselves to setting goals and policies forachieving them, executive staff works on aday-to-day basis for the owners to achieveprescribed goals.

The forms of ownership in capitalist enterprises arealso discernible in SSEOs. Box 2.2 shows the formsof ownership in different types of SSEOs.

Box 2.2: Forms of ownership in

SSEOs

However, unlike capitalist enterprises, most SSEOshave not effectively separated the performance ofgovernance and management roles. This is partlybecause these organizations operate on collectiveand democratic principles that result in theprevalence of self- and collective management asopposed to hierarchical management which istypical in capitalist enterprises.

Self-management is also prevalent in some SSEOspartly because of their small size. In organizations


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Ownership Type of SSEO

Sole proprietorship Social enterprises, foundations

Partnership Social enterprises, foundations,mutual benefit societies,associations, cooperatives

Corporate/shareholding Cooperatives

like social enterprises, mutual benefit associationsand community-based organizations, the owners ormembers who set goals and make policies to guidethe activities of the organization are the same peoplewho participate in managing the organization bycarrying out day-to-day activities necessary toachieve their goals. In this way, the same membersswitch back and forth between governance andmanagement roles.

Hierarchical management also features in someSSEOs. However, open and voluntary membershipand democratic leadership in these organizationsreduces the hierarchy to a mechanism for sharinginformation rather than issuing orders orcommands. A case in point are the cooperatives inAnglophone countries that have evolved with a legalframework requiring them to separate theperformance of governance and managementfunctions (Develtere, 2008; Wanyama, Develtere andPollet, 2009), thereby resulting in a hierarchicalstructure that separates the members, managementcommittee and management staff.

Thus, the separation (or non-separation) ofgovernance and management roles in SSEOs hasresulted in slightly different management styles, withimplications for members’ participation in thegovernance and management of their organizations.

The next section explores the forms of members’participation in different types of SSEOs.

2.2.3 Participation

The diversity among social economy organizationssuggests that the form of governance andmanagement adopted by any organization tends tobe determined by its nature and context ofoperation. It is not unusual for the same type oforganization in different locations and circumstancesto have different governance and managementstructures and practices. While being conscious ofthese realities, it is useful to attempt somegeneralizations about the participation of membersin the governance and management of differenttypes of SSEOs.

As already mentioned, collective ownership anddemocratic governance are typical of most SSEOsaround the world, with the exception of some socialenterprises. Such ownership and governance allowsthe members (and sometimes the workers, usersand beneficiaries) to participate in decision-makingequitably; that is, the various contributions ofmembers are given the same recognition and value.

However, the degree of participation varies widelywith the type of organization and the context ofoperation. For instance, some organizations mayweight members’ votes, not only to reflect thedifferent degrees of activity of the group’s membersbut also to acknowledge the differences among themin terms of rank and file membership numbers. Someorganizations may turn out to be more democraticthan others. Be that as it may, it can be generalizedthat some organizations allow their members to


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Neela, 39 y.o., is the founder of a project of ruralcooperative sustained by the ILO which gathers womenfrom her village of Kesavarayampatti (Madras).

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participate in both management and governanceissues while others allow their members to participatein one or the other. To this extent, we can identifyself-management, collective management andhierarchical management in SSEOs.

Self-management

This is the epitome of the principle of democraticleadership in SSEOs. Self-management accords allmembers (and sometimes workers and users) the rightto participate in the governance and management ofthe organization by voting on issues requiringdecisions. Unlike in private enterprises whereshareholders vote on the basis of their capital share inthe firm, the members’ votes in SSEOs are equal. Theresult of granting equality to all members isself-management that bestows control of theorganization on each member. Solidarity structures areused to generate goods and services for the membersand their dependants. Members rely on negotiatedand reciprocal rules that are based on collective actionand social control to carry out their activities. Thisfundamentally helps to establish a more-or-less flatleadership structure that de-emphasizes hierarchicalauthority in governance and management. Each

member, therefore, assumes the responsibility of bothgoverning and managing the organization from time totime. Figure 2.1 below illustrates how members playdifferent roles at different times.

This members’ control model of management istypically applied in small-scale organizations wherethe members are also the workers and sometimesthe beneficiaries. Examples include workers’cooperatives, mutual benefit societies, associations,social enterprises and community-basedorganizations. In Latin America and mostFrancophone countries, this form of management isthe most common in SSEOs, not just because of thesize of the organizations but also because of theemphasis on the empowering and liberating natureof the solidarity-based economy.

Collective management

Members’ ownership of an organization sometimesresults in sharing responsibilities among themselveswithout necessarily ceding the democraticcontrolling authority of all members. The result isthat members collectively manage the organizations,but play different roles. This is what we refer to as


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Members

ManagersGoverners

WorkersInvests in

Micro-enterpriseUsers

Figure 2.1: Members’ roles in a self-management model

collective management. This is widely used inmedium and large social and solidarityorganizations, particularly in Europe, North Americaand Africa. This form of management arises fromthe fact that self-management may not be effectivein a large-scale business (Davis, 2004: 92). As anenterprise grows in size, its management needstransform its governance and management structureto embrace specialization of roles. An example ofsocial enterprises may help to explain this point.

Social enterprises – organizations that seek businesssolutions to social problems (Thompson andDoherty, 2006: 362) – tend to start mostly as eithersole proprietorships or partnerships. Consequently,ownership and membership tend to be small at thebeginning. This makes it unnecessary to separategovernance and management roles; the ownersplay both roles and the organization isself-managed. When the organization grows in size,changes are required in governance andmanagement, which leads to the separation of thetwo roles in the performance of organizationalactivities. The organization then adopts collectivemanagement. The example of Suma Wholefoods inCase Study 2.1 clearly illustrates this transformation.

Collective management is also commonly used infoundations that are classified as SSEOs. Being

largely philanthropic organizations, foundationsstart with the initiative of individuals andsubsequently expand ownership to others whoshare the same goals. With small ownership, thepartners share the responsibility of governing theorganization by constituting themselves into aboard of directors. The composition and size of theboard tend to depend on the number of partners:where there are few partners, all of them wouldmost likely become board members, but wherethere are many partners, they would probably electa smaller group to constitute the board. The boardthen engages professional staff to implement itsdecisions. In this way, the board plays thegovernance role while the hired staff plays themanagement role.

Mutual benefit societies and community-basedorganizations also exemplify collective managementin the sense that participants negotiate and decideon the conditions and rules that govern members’conduct and group activities for achieving theirgoals. Procedures and leadership roles are alsonegotiated and agreed upon at the very beginning.Thereafter, leadership roles are assigned, eitherthrough simple elections or by selecting individualsbased on their capabilities. In most cases, threeleadership roles are created: the chairperson,secretary and treasurer. The chairperson is normally


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Implementationof decisionsby members

Members' /Users oversight'

Policy-makingby members

Governance&

Managementof SSEO

Figure 2.2: A collective management model

given the responsibility of acting as the figureheadof the group by calling and chairing meetings, thesecretary keeps a record of the group’s activities andthe treasurer serves as the custodian of the group’sassets or resources. These leadershipresponsibilities tend to be regarded as giving aservice among equals. A leader is viewed as the“first among equals” who is not expected to“command” his colleagues, but to “consult, facilitateand guide”.

With this simple structure, all members collectivelyparticipate in the governance and management oftheir organizations, with the leaders only playing afacilitating role. This form of structure is particularlyvisible in rotating savings and credit associations(ROSCAs), accumulating savings and creditassociations (ASCAs), mutual health insuranceassociations and small community-basedorganizations like women’s groups and youthgroups (Wanyama, 2001). Figure 2.2 illustrates anexample of a collective management model inSSEOs.

Thus, in this management model, members and/orusers share the responsibility of governing andmanaging the organizations without any one of thembeing necessarily superior to the others. As inself-management, the governance and managementstructure remains flat, but members play differentroles.

However, the competitive environment in which theSSE finds itself is increasingly compelling someorganizations in some parts of the world to adoptmore formal and sometimes hierarchical structuresof governance and management, without losing thecollective and solidarity character. For example,micro-insurance organizations, which needprofessionalism to sustain their activities in acompetitive environment, are increasingly hiringspecialized staff to manage their activities whilemembers retain the governing responsibilitythrough elected boards (Qureshi, 2006).Cooperatives in Anglophone countries are alsoadopting this mode of governance, shifting fromself-management or collective management tohierarchical management.

Hierarchical management

Hierarchical management is typical in capitalistenterprises (or even in the public service) where alay board of directors provides policy andleadership, and management is responsible for theday-to-day running of the business. This form ofmanagement also is slowly emerging in the SSE.The finest example is to be found in cooperatives inAnglophone countries and some large-scale socialenterprises.

Hierarchical management in the SSE may resultfrom demands for efficiency and competitiveness,while in some cases it is a response to the legalenvironment of the organizations. For example, inAnglophone countries that follow the Britishtradition of cooperative development, legalframeworks have been developed to guide thegovernance and management of cooperatives. Suchlegislation is informed by the notion thatcooperatives have two parts: the enterprise side thatmakes the money and the social side that spends it.In this view, cooperatives are, on the one hand,associations of people and, on the other hand,economic undertakings to be managed like anyother business (Davis, 2004: 91). This dualistic viewof cooperatives is partly responsible for the idea ofseparating governance and management functions,which creates a hierarchical structure in thegovernance and management of cooperatives in theAnglophone world.


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San Lorenzo's Cooperative in Sardinia.

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In accordance with thecooperative principles of openand voluntary membership anddemocratic leadership, membersare the owners of theseorganizations and they constitutethe supreme decision-makingbody. Members, therefore, playthe governing function incooperatives. Consequently, allmembers participate directly orindirectly in the Annual GeneralMeeting (AGM) or Assembly thatcooperatives hold every year,which is the supreme authority ofthe organization. Wheremembers participate indirectly,as is the case in largecooperatives, members electdelegates to represent them atthe AGM. The Assembly democratically elects aManagement Committee for a specified period oftime to be responsible for the management of thecooperative.

The AGM also elects a Supervisory Committee toplay an oversight or monitoring role in themanagement of the cooperative. This committee isresponsible for ensuring that the ManagementCommittee and employed staff carry out theirfunctions in accordance with the by-laws of thecooperative, the provisions of cooperativelegislation, the resolutions of the AGM and the bestinterests of the members.

It is the responsibility of the ManagementCommittee to implement the decisions made by theGeneral Assembly or AGM of the cooperative. To dothis, the Committee is mandated to hire staff toassist it in carrying out management functions.Consequently, cooperatives’ day-to-day activitiesare handled by management staff under thedirection of the Management Committee. Such staffnormally includes a manager, accountant(s), clerk(s)and secretary. The size of the staff varies with thenature and size of the cooperative. Thus, like inprivate enterprises, most cooperatives haveseparated governance and management functions.Figure 2.3 illustrates the hierarchical structure of

governance and management in cooperatives inAnglophone countries.

2.2.4 Regulations

SSEOs have been in existence for centuries, butmany of them, especially small and/or informalorganizations, have not been legally recognized insome countries. For instance, community-basedorganizations, communal associations and mutualbenefit societies have been a feature of mostsocieties (Defourny and Develtere, 2009: 2-8), butare rarely legally recognized under these names inmost Anglophone countries. Consequently, therehas not been a specific regulatory framework for thegovernance and management of these organizationsin these countries. The regulations for publicorganizations and capitalist enterprises which offersimilar services tend not to apply to SSEOs. Even inFrancophone countries – where most of themutualist SSEOs are widely recognized in law – theregulations for the provision of certain services tendto exclude some of the smallest of theseorganizations. The example of the application of“Code des Assurances CIMA” in West Africa (seeBox 2.3) illustrates this point.


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GeneralAssembly

ManagementCommittee

SupervisoryCommittee


Management staff:Secretary/General

Manager andother support staff

Figure 2.3: Governance and management in cooperatives

Box 2.3: Application of “Code

des Assurances CIMA” in

West Africa

In 1995, the Zone Franc countries of West Africaadopted the insurance regulatory framework ofthe Conference Inter-Africaine des Marches

d’Assurance (CIMA) to govern the insuranceindustry. The “Code des Assurances CIMA”defines the 23 different classes of insurancebusiness that can be practised; stipulates thelicensing process for the different classes ofinsurance business; and sets standards (likeminimum capital requirements, solvency ratiosand bookkeeping requirements) for operators.Despite the existence of this legislation in theregion, most countries do not apply it to mutualbenefit societies that operate insuranceschemes. Governments and CIMA officials areaware that these societies do not conform tothe “Code” due to their inability to meetstandards like minimum capital requirementsand solvency ratios, yet they meet needs thatcommercial insurance companies do not. CIMAofficials and governments have, therefore,opted to tolerate the non-complying mutualbenefit societies, which continue to begoverned outside any regulation.

Source: Aliber and Ido, 2002: 8

Nevertheless, there are attempts in many countriesto formally recognize all SSEOs in law, which ispaving the way to the development of regulatoryframeworks for these organizations. For example,governments in Ethiopia, Rwanda and South Africaare developing legislation and regulatory agenciesfor cooperatives. In Francophone West Africa, thereare attempts at legislating mutual benefit societiesand associations, which may pave the way for aregulatory framework for their governance andmanagement.

This should not be misconstrued to mean that theentire SSE does not have legislation and regulationson governance and management. In some countries,there are regulations for some organizations, but notothers. For instance, reference has already been

made to cooperatives in Anglophone countries inAfrica that operate according to legislativeprovisions and there are government agencies thatregulate their registration, management andliquidation (Develtere and Pollet, 2008). Yet in thesame countries, there is no legislation or regulationfor other types of SSEOs, particularly the small andinformal ones like community-based organizationsand mutual benefit societies. Whereas cooperativesare managed and governed according to legalprovisions that are enforced by a regulatory agency,the other kinds of SSEOs are not. Similarly,Francophone countries seem to emphasize the roleof mutual benefit societies in their laws more thanother forms of SSEOs, particularly cooperatives. Asa result, there are regulatory frameworks for mutualbenefit societies, but not for cooperatives. This kindof scenario has resulted in different practices acrosscountries and regions of the world in thegovernance and management of the SSE.

2.2.5 Human resource management

Human resource management refers to the processof recruiting, developing and motivating people towork for the achievement of organizational goals.This involves developing the organizational structureto determine staffing needs; recruiting the requiredpersonnel; orienting and training recruited staff;career development; compensation orremuneration; and performance evaluation(Churchill and Frankiewicz, 2006: 200; Davis, 2004:132). This definition implies, at least in theory, theseparation of governance and managementfunctions in the sense that there has to be an“owner” playing the governance role to determinestaff needs and to recruit people into theorganization to perform management functions. Thissuggests little application of human resourcemanagement in SSEOs since most of them tend tocombine governance and management functions. Itis only in those organizations which have separatedgovernance and management functions that humanresource management issues are clearly discernible.

In such organizations, the management committeeor board of directors recruits staff to carry outmanagerial functions. Whereas the largeorganizations, particularly cooperatives, tend to


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apply a professional recruitment process byfollowing a typical procedure,1 the relatively smallerorganizations rarely follow such a process. Thiscould be because of a variety of reasons, such as alack of resources to meet the related expenses andthe character of the board or managementcommittee. After recruitment, few in the SSE traintheir staffs; the main exception once again beingcooperatives. In some countries, such as Kenya,Tanzania and the UK, there are cooperative collegeswhere the management of cooperatives can obtaintraining. The other types of organizations do nothave such specialized institutions that can train theirstaff. Low remuneration, relative to market rates, hascaused many of the organizations to struggle toretain trained, competent and qualified staff as theirturnover tends to be high.

Though the relatively smaller SSEOs do not havesuch elaborate human resource managementsystems, they use alternative ways of encouragingpeople to work towards the achievement of theirgoals. For recruitment, most community-basedorganizations, mutual benefit societies andassociations search among their membership forqualified personnel and rely on the specializedtalents of their members. As illustrated in theexample of Suma in Case Study 2.1, socialenterprises and worker cooperatives rely on theirmembers’ ingenuity to get their work done. Themember-workers depend on self-awareness andcontinuous reflection on personal performance toidentify areas where lessons may be learned forimproved performance; they thereby develop whatDavis (2004: 120120-122) calls “self-managementskills”. They turn the entire organization into a“learning hub” that develops the human resourcesfor the enterprise. Capacity building is within theorganization and systems for internal learning arebased on democracy and empowerment. It shouldalso be pointed out that the workers’ remunerationis not just comprised of the traditional money andbenefits package, but also includes goods andservices generated by the organization.

2.3 Managing resources inSSEOs

2.3.1 Resource needs

Conditions of necessity in society tend to generate ahost of responses from people, most of which endup as SSEOs. Having been born out of necessity(Defourny and Develtere, 2009: 18), the resourceneeds of the SSE are as diverse as the problems thatconfront human society. In their quest to cover thevarious risks that their members encounter, mutualbenefit societies require resources to cover theirmembers for illness, funeral expenses, poorharvests, school fees and other forms of precariousliving conditions. Similarly, community-basedorganizations and associations have a host ofproblems to address in the quest to satisfyindividual and communal needs: farm and pastorallabour deficits; educational, health, water,communication and household facilities; andinnovations in various economic activities toimprove living conditions, among others.Cooperatives and social enterprises in differentsectors require working capital to operate andimprove the productivity of their diverse businessventures to meet their social goals. In short, SSEOsrequire a variety of resources, ranging from humanto financial, to produce goods and services forresponding to the risks and scarcities that confronthuman society.

2.3.2 Resource sources

While SSEOs can draw resources from diversesources, they largely depend on resources that areprovided by their initiators and/or members. Theresources provided by members in cooperativestake the form of shares, while in mutual benefitsocieties, community-based organizations andassociations they are periodic subscriptions, assetsin kind and voluntary work. In social enterprises,these resources take the form of contributions tocapital or assets in kind. In foundations, supportersof the cause make philanthropic donations orbequests (Fonteneau and Develtere, 2009).


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1 The procedure includes determining the need for staff; providing a job description of the position; clarifying the selection criteria; advertisingthe vacant position both internally and externally; evaluating the applicants; and selecting the best qualified candidate for the job.

In addition to the resources generated from theinitiators and members, SSEOs also obtainresources from their own activities. Being economicenterprises, many of them generate returns fromselling goods and services to the public, often incompetition with other private operators. Thereturns generated in this way tend to be reinvestedin the activities of the organizations, if they are notrequired to provide a social service.

Because they rely on resources provided by theirmembers and by returns from their activities, SSEOsare often said to be autonomously financed.However, these organizations also receive resourcesfrom public and philanthropic organizations toenhance their capacity to provide goods andservices. Public resources take the form of subsidiesfrom local and national governments as well asofficial development assistance from developedcountries to countries in the South. Philanthropiccontributions are donations from non-governmentalorganizations and foundations, mainly in the North.

It should, nevertheless, be emphasized thatacceptance of public resources and donations doesnot necessarily usurp the autonomy of SSEOs. Theorganizations tend to accept the resources in theinterest of supporting and upholding their owncourse. Typically, these organizations receiveexternal resources because of the public’s desire toincrease the availability and accessibility of theirgoods and services, even when the target groupcannot adequately pay for the production costs.Sometimes members’ subscriptions cannot coverthe cost of producing and providing the goods andservices that are deemed desirable by theorganization and the community.

2.3.3 Resource monitoring

Guarding against fraud, theft and misuse ofresources is important in all organizations. Privateorganizations defend themselves against fraud andmismanagement by establishing managementsystems that include strong control or accountingprocesses, internal audits and strong governingboards to monitor the management of theorganization (Biety, 2005: 239). Though SSEOs haveaccounting, auditing and monitoring systems, the

extent to which they are used in managingresources varies with different forms of organization.

Accounting

This refers to the function of gathering, compiling,reporting and archiving an organization’s activitiesand resources. The information generated by thisfunction helps individuals in the governance andmanagement roles to make informed decisions (Kimand Nofsinger, 2007: 25). In private organizations,this information is not just important for internal usebut also for outsiders: investors, bankers, creditorsand employees have a keen interest in the financialhealth of the firm. Consequently, the accountingfunction is central to controlling the resources andactivities of private organizations.

Accounting practices vary in SSEOs. Whereas therelatively formalized and large organizations useinternational accounting standards to generate,report and maintain information on theorganization’s resources and activities, the lessformalized and smaller organizations do not. Thoseorganizations use basic bookkeeping, in which anindividual or an organization records financialtransactions like sales, purchases, income andpayments. Some organizations even rely onindividual memory to generate and reportinformation on their resources and activities.


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Women Cooperative (project supported by the ILO):in the quarries of Mtongani (Dar Es Salaam), a mushroomand hen house project directed under cooperative formwas proposed as an alternative to the stone breakage thatused to be the principal activity of women in the dictrict.The production is then sold in the markets.

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This variation in accounting processes is partly dueto the regulations (or lack of regulations) on theseorganizations. For instance, in most Anglophonecountries, regulations require cooperatives to useinternational accounting standards to annuallyreport their assets and liabilities to the members;however, there is no such requirement forcommunity-based organizations, mutual benefitsocieties and associations and so their accountingprocedures may involve using individual memory,keeping minutes of meetings or performing basicbookkeeping. In these situations, even memberswho have a fair knowledge of their organization’sresources may have difficulty contributing all of theirindividual perceptions to the planning process.Consequently, leaders or members may makedecisions based on erroneous premises fromsubjective or poor information.

Auditing

Generally, auditing refers to an evaluation of aperson, organization, system, process, enterprise,project or product. Audits are performed toascertain the validity and reliability of informationand to provide an assessment of a system's internalcontrol. The goal of an audit is to express an opinionon the person, organization or system in question.

In the management of capitalist enterprises, thereare internal and external auditors. Internal auditorsoversee the organization’s financial and operatingprocedures; check the accuracy of financial recordkeeping; ensure compliance with accountingregulations; improve internal control and detectfraud and misuse of resources. Conversely, externalauditors are accountants from outside theorganization whose role is to review theorganization’s financial statements and itsperformance in meeting its members’ needs and itssocial responsibility goals. External auditors attest tothe fairness of the financial statements and theiraccuracy in materially representing thesocio-economic condition of the organization ((Kimand Nofsinger, 2007: 27-28). Thus, whereasaccountants are responsible for producing theorganization’s management information, auditorsare supposed to monitor and check the accuracy ofsuch information.

Auditing, like accounting, is sparingly applied inSSEOs. External auditing is widely used incooperatives, social enterprises and foundations,but rarely used in mutual benefit societies,community-based organizations and associations.Whereas social enterprises and foundationsoccasionally seek external auditors to express theiropinions on the soundness of their organizations forthe sake of assuring themselves of theirsustainability, cooperatives, especially inAnglophone countries, have had to produce externalaudit reports annually in order to comply withrequirements in the governance regulations. Internalauditing is more prevalent in Anglophonecooperatives and, to some extent, social enterprisesand foundations. The internal audit function incooperatives is performed most of the time by thesupervisory committee in Anglophone countries orby a Commissaire aux comptes in someFrancophone countries, which is not found in themanagement structure of the other types of SSEOs.

It is apparent that mutual benefit societies,community-based organizations and associations donot have formal structures to perform the auditfunction. The implication is that these organizationsmay be weak in evaluating their operating proceduresand checking the accuracy of managementinformation. As much as all members tend to performoversight of the management of these organizations,they may not be very able to detect fraud and misuseof resources since they are the ones who areinvolved in the management process.

Monitoring

Like in capitalist enterprises, members or owners ofSSEOs primarily monitor the performance of theirorganizations; however, monitoring practices varyacross different forms of organization and regions ofthe world. In Francophone countries and much ofLatin America, where the mutualist and solidaritytraditions emphasize empowerment and equality, allmembers directly monitor the activities of theirorganizations as part of their work processes. InAnglophone countries, monitoring varies withorganizational forms. In social enterprises andfoundations, monitoring is done by the board ofdirectors, while in cooperatives, mutual benefit


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societies, community-based organizations andassociations, monitoring is the responsibility of thegeneral assembly, sometimes through managementas with cooperatives. The board of directors insocial enterprises and foundations and themanagement committee in cooperatives use auditreports to assess the performance of theorganization and take the necessary actions tosafeguard the goals of the organization; however,the lack of audit reports in the other types of SSEOsmay lead the general assembly to act on the basis ofsubjective opinions of the members. The situationcould be worse where there is no regulatoryframework to supplement the oversight role of thegeneral assembly or the membership.

2.4 Financing mechanismsfor SSEOs

In addition to their internal resources, SSEOs havetraditionally been funded through grants and loans.Whereas grants are gifts given by donors, loans arefunds that SSEOs borrow from financial institutions.Because donors retain the prerogative to providegrants, SSEOs don’t have control over this source offinancing and it has proved to be unsustainable. Onthe other hand, the availability of credit to SSEOshas been shrinking because financial institutionsconsider them to be high-risk borrowers. Also,financial institutions often have offered short-termloans rather than the more desirable long-termloans. These realities have combined to reduce theavailability of financial resources to the SSE fromoutside the organizations in the midst of increasingfinancial demands.

These demands have led to financial innovation inmany parts of the world. One of the innovations isthe development of a customized financial sectorthat does not merely replicate or extend existingfinancial products and instruments, but offers acomplex social investment landscape with diversefinancial products that correspond with the needsand life cycle of SSEOs (including the start-up, oreven pre-start up in some cases, consolidation andgrowth stages). Donors are also responding to thislandscape with a strategic reorientation from gifts toinvestment by starting new funding streams like

venture philanthropy. The creation of new financialproducts and a new vocabulary (e.g. mission-relatedinvestment, impact investing, programme-relatedinvestment, social finance, solidarity finance, etc.)that leans towards ethical or socially responsibleinvestment (SRI) could be a potential source offinance for the social economy (Mendell andNogales, 2009: 97-98).

Some SSEOs also are moving to the stock market toraise capital for their operations. For instance, inKenya, the Cooperative Bank, though licensed to dobanking business under the Banking Act in 1968, hasretained for a long time its tradition of being acooperative by restricting ownership of the bank tothe cooperative movement. To this end, 70 per centof the bank’s shares have been held by cooperativeswhile 30 per cent have been held by individualcooperators. However, this structure of ownershipchanged in 2008 when the bank opened upshareholding to the general public, following theconclusion of a successful initial public offer (IPO) of700 million shares. The bank’s shares are nowtrading at the Nairobi Stock Exchange to raise morecapital, which has enabled the Cooperative Bank toboast of a capital base of over KES 13.5 billion (USD$180 million), which makes it one of the strongestbanks in Kenya.

Indeed, innovation to raise more capital for thesocial economy is going well beyond the capitaliststock market to the creation of social stockexchanges in countries such as Brazil andSouth Africa. This particular innovation has inspiredthe Rockefeller Foundation in the United States tofund research at Oxford University in Britain on thedevelopment of secondary markets and a socialstock exchange for the SSE in other parts of theworld (Mendell and Nogales, 2008).

It is also significant to note that networks of financialinstitutions that invest directly and, in some cases,exclusively in the social economy are being formedin some parts of the world. Until recently, forexample, no long-term investment products wereavailable in Quebec, Canada. This tended to limit allavailable finance to short-term lending. Thissignificantly hampered the capacity of SSEOs toconsolidate their activities and grow. In response to


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this situation, Chantier de l’économie sociale

recently established Fiducie du Chantier de

l’économie sociale, a patient capital fund thatprovides long-term investment capital to SSEOs.Case Study 2.3 elaborates on this initiative.

2.5 Towards efficientmanagement of SSEOs

2.5.1 Conceptualizing efficiency

Efficiency tends to be defined differently in differentcontexts and for different purposes. More generally,it is normally defined as a measure of how well aninstitution utilizes available resources (inputs) tomaximize results (outputs). In business circles, thisentails minimizing inputs while maximizing outputsor profits. Without necessarily restricting ourselvesto measurements, we use the term here from itsadministrative perspective to mean getting the rightthings done in order to achieve the set goals. Giventhat SSEOs address social problems within thecontext of their identity and operating principles, thequestion that arises is how best can they govern andmanage their activities?

2.5.2Strengtheningmanagement

As already explained,management practicesin SSEOs vary widely.Whereas large andmore professionalorganizations employtrained staff toperform managementfunctions likeaccounting andauditing, the smallones tend to rely ontheir member-workersto carry out thesefunctions. Thisvariation is partlybecause SSEOs have,

in many parts of the world, largely operated withlimited performance reporting requirements, fewaccounting conventions and only minimal disclosureregulations (Nicholls, 2009: 758).

Nevertheless, SSEOs operate in the sameenvironment with for-profit enterprises, and theresultant competition is increasingly triggeringinnovations in the management of SSEOs. Someorganizations are becoming more competitive,increasing the specialization of their functions,employing professional staff to be in charge of theirmanagement functions and using conventionalhuman resource management practices that includenegotiating collective bargaining agreements withemployees. Case Study 2.2 on Githunguri DairyFarmers’ Cooperative Society in Kenya clearlyillustrates how professionalism has improved theefficiency of that organization.

Other organizations are, however, not moving inthe direction of the private enterprise but rather arestrengthening performance reporting by embracingsocial audits that focus on reporting progresstowards mission objectives within core activities.Such social reporting typically acts as alongitudinal assessment of internal performanceand tends to use descriptive metrics which are


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typically human in scale. It looks at largelynon-comparative, individual or community-levelchanges or developments (e.g. profiles of targetpopulations or stakeholder characteristics) andsome financial information. This audit informationprovides a narrative of particular actions andobjectives and can be used to demonstrateprogress over time. Social audits are usuallyqualitative, which means that they focus on impactmeasurement through accounting for specific –and, therefore, often partial – descriptive outcomesof strategic action (Nicholls, 2009: 761).

2.5.3 Overseeing and monitoring

The point has already been made that membersremain the key overseers of their organizations.Organizations that have separated governance andmanagement roles certainly require increasedvigilance from their management boards orcommittees. These SSEOs particularly benefit fromboards that are committed to the spirit of socialentrepreneurship and the vision of increasing theproduction of goods and services to the members.Like private enterprises’ boards of directors, themembers of these organizations’ managementcommittees or boards need to put the interests ofthe members and the wider community before theirown personal interests and exercise the duty of careby doing what an ordinary prudent person would dounder the same position and circumstances. Toexecute the essential duty of supervision, the boardor committee holds regular meetings to review theorganization’s operations and management. Onceagain, Case Study 2.2 illustrates how a committedboard of directors can turn around the fortunes ofthe social economy.

However, in parts of the world where directparticipation of members is the norm, themonitoring role is taking a different course. In Brazil,for example, management boards of cooperativesdo not meet regularly – largely because theseorganizations are shunning this mode of governingin favor of direct member participation. The result isthe emergence of workers’ cooperatives – as inArgentina since the country’s economic collapse. Inthis case, members are vigilantly exercising theiroversight role while also playing the managementrole.

2.6 Key findings

This chapter set out to explain how SSEOs aregoverned and managed. It is clear from this analysisthat these organizations are guided by the principleof democratic and participatory leadership to governand manage their activities. This takes differentforms, ranging from the direct engagement ofmembers in the governance and managementprocesses to the representative involvement ofmembers in separate management and governancefunctions. Whereas the demands for efficiency andcompetitiveness are increasingly driving some of theorganizations to professionalize their governanceand management, others are responding to thesame challenges with alternative innovative ways offinancing and managing the organizations to keepthem people-centered and oriented to their socialcause. These innovations demonstrate theentrepreneurial ingenuity of the SSE that isaccustomed to responding to emergent problemsand crises in society.


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Case Study 2.1: Suma wholefoods

Suma is an independent wholesaler of wholefoods based in Elland, UK employing around 150 people. Itstarted in 1974 as a one-person business when the proprietor, Reg Tayler, moved from London to Leedsand opened a retail shop, Plain Grain. In August 1975, at a meeting attended by all the wholefood shops inthe north of England, he proposed they set up a wholefoods wholesaling cooperative to supply eachother.

Reg and his friends set up in the back kitchen of a house in Victoria Road, Leeds, from where they soldcereal flakes, dried fruits and brown rice. They soon needed more room, and so they rented a lock-upgarage nearby – this is where the name ‘Suma’ was first used for the growing business. At the time, Regwas working as a delivery driver for Jonathan Silver, taking clothes to his chain of menswear shopsaround the north of England. Reg delivered the wholefood orders from Suma in between the “official”deliveries for his boss, who knew what was going on but turned a blind eye to it.

Within a year Suma needed proper premises and, in 1976, it acquired a tiny two-storey warehouse inWharf Street, Leeds. In 1977, Reg sold the Suma business to the then seven employees, who became thefounder members of Triangle Wholefoods Collective, a workers’ cooperative trading as Suma.

In 1978, Suma moved into a much larger three-storey warehouse at 46 The Calls, Leeds. It seemed huge,but rapid expansion of the wholefood market compelled Suma to move to a 70,000 sq. ft. warehouse shedin Dean Clough Mills, Halifax in 1986. There followed 15 years of steady growth in turnover and of thecooperative. There was a corresponding increase in the complexity and sophistication of the business,and the structure of the cooperative went through many modifications to manage this change.

In the early days, the partners would meet once a week to openly and freely discuss strategy andoperations and make decisions by consensus. However, over time, acrimony ensued when individualemployees started making day-to-day decisions and implementing them. Furthermore, decisions takenone week would be reversed the next week. In 1986, Suma reorganized and created an elected six-personmanagement committee that meets weekly to routinely run the business on behalf of the members. Thecommittee is supported by management staff specialized in personnel, finance and operations. The 150employees are multi-skilled and all own a share of the business. There is no chief executive and anyemployee can submit a proposal for consideration by the management committee.

Source: Thompson and Doherty, 2006: 364-365; http://www.suma.coop/about/a-brief-history/


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Case Study 2.2: Githunguri Dairy Farmers’ Cooperative Society, Kenya

Githunguri Dairy Farmers’ Cooperative Society was formed in 1961 by 31 dairy farmers in the GithunguriDivision of Kiambu District in Central Kenya. Its goal was to collect and market milk from members. Likemany other dairy cooperatives, state control over the marketing of milk and the management ofcooperatives had stifled its operations to near-dormancy by the mid 1990s.

The liberalization of the cooperative movement since 1997, coupled with a focused and well-intentionedmanagement committee that took office in 1999, significantly helped to turn around the performance ofthe Society. With the new power to hire and fire staff, the committee hired professional staff to steer theday-to-day management of the cooperative. It also used its power to borrow against the society’sproperty to get a loan of about 70 million Kenya shillings (about Euro 880,000) from OIKO Credit of theNetherlands in 2003 to put up a dairy processing plant. There has been a tremendous turnaround in thefortunes of the cooperative since the commissioning of the plant in 2004.

Membership of the cooperative now stands at 17,000. It has an annual turnover of 3 billion Kenya shillings(about Euro 30 million) and collects an average of 170,000 litres of milk per day, up from 25,000 litres in1999. It has several vehicles for transporting milk from 41 collection centres in the Githunguri Division ofKiambu District to its plant in Githunguri town. The plant produces four main branded products that aresold in Nairobi: packed fresh milk, yoghurt, ghee and butter.

Besides this activity, the cooperative also provides productive services to its members. These includeartificial insemination, extension services and animal feeds in its 31 stores throughout its area ofoperation. These services are available to members on credit which is recovered from the sale of theirmilk. These activities have led to tremendous improvement in milk production by members, to which thecooperative has responded by offering competitive prices and promptly paying for members’ produce. Itsells some of the milk to other processors in Nairobi.

The expansive activities of the cooperative are taken care of by a staff of about 300 employees who arerecruited based on an employment policy. Whereas the lower cadre staff is recruited from within theDivision, management staff is sought nationally and appointed on the basis of professional qualifications.It is significant that employees have formed a trade union, which has entered into a collective bargainingagreement (CBA) with the management of the cooperative. This is increasingly enabling the cooperativeto attract and retain staff more effectively than in the era of state control when there was no employmentpolicy but only the discretion of the Commissioner of Cooperative Development.

Source: http://www.fresha.co.ke/about-us/githunguri-dairy-farmers-cooperative/


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Case Study 2.3: La Fiducie de l’economie sociale and

Finance Solidaire in Quebec

The Fiducie of the Chantier de l’économie sociale was established in 2007. For several years, socialeconomy enterprises expressed the need for financial products other than traditional grants and loansand, at the same time, discussed ways to retain long-term capital in their businesses. They wanted newproducts that would take their social mission into account. Many private and institutional investors werereticent about engaging in the social economy. This, despite convincing evidence of lower loan loss ratiosin social economy enterprises and a survival rate twice that of traditional private businesses.

The Fiducie is a response to these needs. It is an intermediary between the financial market and socialeconomy enterprises. The Fiducie offers a product to complement those available on the market already:“patient” capital, in other words, loans with a 15-year capital repayment moratorium. These investmentsare offered in two forms: operations patient capital – to finance costs related to working capital, marketingof new products and the purchase of equipment – and real estate patient capital – to finance costs that aredirectly linked to the acquisition, construction, or renovation of real estate assets. The Fiducie works withan impressive network of stakeholders, increasing its capacity to effectively evaluate projects in a realisticand careful manner.

The Fiducie’s initial supply of capital came from Economic Development Canada (a grant from theGovernment of Canada) and a number of investors including two large labour solidarity funds (theFédération des Travailleurs du Québec’s Fonds de solidarité, and the Confédération des syndicatsnationaux’s Fondation, Fonds de développement de la CSN pour la co-opération et l'emploi) andInvestissement Québec (a loan from the Government of Québec). With this initial fund of CAD 52.8 million,the Fiducie can invest in and support the development of social economy enterprises. By attractingdifferent investors, the Fiducie is able to pool risk and reduce the cost of financing for enterprises.

Since it was established in 2007, the Fiducie has invested CAD 11.43 million in 39 social economyenterprises in diverse sectors throughout the regions in Québec. These investments by the Fiducie havegenerated a total of CAD 66.2 million in investments that have created and/or consolidated more than1,120 jobs. The leveraging capacity of the Fiducie is almost 1:6, demonstrating the significant impact of itsinitial investments in social economy enterprises.

Source: Mendell and Nogales, 2009. For more information visit http://fiducieduchantier.qc.ca


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Chapter 3: Policy framework fordeveloping the SSE

3.1 Introduction

The SSE is a phenomenon that has been gainingincreasing economic, social and political visibility.One of its novelties is the way it has been impactingpublic policy planning, since its subjects –organizations and entities – seek recognition,institutionalization and support for projects andactivities.

Public policies for the SSE are evolving and demandthe strong and active participation of civil society intheir planning, execution and monitoring.

This chapter begins by presenting the backgroundon public policies in the SSE, including the maininstruments and trends, as well as the relationship ofthese policies with “transverse” and “emancipatory”public actions. Following that discussion, someexperiences from selected countries in Africa, Asia,Europe, Latin America and North America arepresented.

3.2 Public policies for the SSE

3.2.1 Background

Initiatives for producing and rendering social andpersonal services, organized according to freeassociation and principles of cooperation andself-management, can be found in many countriesunder many names. Indeed, the existence andgrowth of this field of practice have brought aboutprogrammes and actions in public agencies topromote these practices as choices regarding work,income, social and democratic participation andbetter quality of life (Gaiger, 2004; Morais & Bacic,2009).

However, the SSE is characterized by difficulties andcontradictions in its definition, conceptualization andmeasurement and in the delimitation of its activitiesand organizations. The SSE is a dynamic conceptthat has been defined differently in various historicaland social contexts. Its meaning continues to evolvein response to changing conditions. But despitethese difficulties, it is understood that from theeconomic, social, political and cultural points ofview, the SSE has been playing a significant role.Globally, one can perceive this in the growingnumber of documents, statements, resolutions,conventions and recommendations that renownedinternational institutions have been producing in thefield of the SSE.

Box 3.1: The SSE and its

recognition at ILO

In a project to systematize ILO documents andlegal instruments, the expression “social andsolidarity economy” was found in five ILOdocuments, two declarations, sixteenconventions and six resolutions, besides otherrecords and memoranda, including resolutionsof the UN General Assembly. It is also interestingto note the direction of ILO technical activitiesthat support SSE initiatives in Africa; there isrecognition of the SSE and its relationship withadvice on policy and law; improving andsupporting access to finance; and capacitybuilding (Poorter, 2010).

Another global reality is the considerable number ofSSEOs. According to the definition of the ILORegional Conference in Johannesburg (2009), whichadopts a broad view of the SSE, the SSE isconsidered to be “enterprises and organizations, inparticular cooperatives, mutual benefit societies,


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associations, foundations and social enterprises,which have the specific feature of producing goods,services and knowledge while pursuing botheconomic and social aims and fostering solidarity”.1

From this perspective, it is worth mentioning that:

� According to the International CooperativeAlliance2 (ICA), there are almost one billioncooperative members and more than 100 millionjobs in its 91 member countries. In Canada,Honduras and Norway, one in every three peopleis a cooperative member, whereas in the UnitedStates the ratio is 1:4, and in Kenya it is 1:5. InChina, Argentina, Brazil and Malaysia, there are180 million, 9 million, 6 million and 5.5 millioncooperative members, respectively.

� According to the International Cooperative andMutual Insurance Federation3 (ICMIF), the mutualmarket share at the end of 2008 increased from2007 to 24 per cent. Of the largest ten insurancecountries representing 77 per cent of the worldmarket, five have over 30 per cent of theirmarkets in mutual and cooperative businesses(the United States - 30 per cent, Japan - 38 percent, France - 39 per cent, Germany - 44 per centand The Netherlands - 33 per cent). This isderived from a sample of 2,750 mutual andcooperative insurers.

� The International Association of Mutuality4 (IAM)is a group of autonomous health insurance andsocial protection bodies operating according tothe principles of solidarity and non-profit-makingorientation. IAM has members in Europe, LatinAmerica, North America and north andsub-Saharan Africa. In Europe alone, there are102 million affiliates and 168 million beneficiaries.

� The World Council of Credit Unions5 provides itsmembers with the opportunity to have their ownfinancial institution and helps them createopportunities for starting small businesses,building family homes and educating their

children. It is present in 97 countries on allcontinents and has almost 50,000 credit unionsand 184 million members. In 2009, they hadsurpassed US$1 trillion in financial transactions(assets).

� The International Raiffeisen Union6 (IRU) is aworldwide voluntary association of nationalcooperative organizations whose work and ideasare based on Friedrich W. Raiffeisen´s principles(i.e. self-help, self-responsibility andself-administration). It was founded in 1968 andhas more than 900,000 cooperatives and 500million members in over 100 countries.

� Events such as the World Social Forum, theInternational Meeting on the Globalization ofSolidarity, the Intercontinental Network for thePromotion of the Social Solidarity Economy, theAsian Citizens Assembly for Solidarity Economy,the Forum for New World Governance and theInternational Conference on the Social Economyshow us that many other “bottom-up”experiences are taking place all over the world,even if they have not been properly accounted orsystematized yet.

Therefore, one perceives that the share of the SSE isgrowing in terms of employment, economicimportance and societal penetration.

Bearing in mind these developments, the mainconcern at the outset might have been theconceptualization of the phenomenon; however,today, it is rather the question of the relationshipwith public policies. This topic is a challenge forboth knowledge and action (Laville et al., 2006).

The SSE is gaining more importance today with theunfolding of the global crisis and its only slightlyinclusive and environmentally sustainable model ofdevelopment. This crisis presents the opportunityto: 1) rethink the way of life in a society that suffersfrom exclusion, inequality, poverty and global


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1 Plan of Action for the Promotion of Social Economy Enterprises and Organisations in Africa, ILO, 2009.

2 http://www.ica.coop/al-ica/

3 http://www.icmif.org/

4 http://www.aim-mutual.org/

5 http://www.woccu.org/

6 http://www.iru.de/

warming; and 2) plan more comprehensive anddemocratic public policies which compriseproduction inclusion, social equality, povertyeradication, reduction of wealth concentration andenvironmental sustainability.

Box 3.2: Crisis and

opportunities

This period of crisis in which we find ourselvesis not only a threat, but also an opportunity tolay the basis of a better economic model. TheSSE enterprises can contribute towardsdesigning this new model as they representanother business format based on value likelong-term benefit, the primacy of people overcapital and respect for the environment (...).Therefore, it is all about working to generate anew growth model based on more transparent,more sustainable and in short, moreresponsible corporate action. A growth modelthat is committed to job creation, to investing inhuman capital and fighting social exclusion.7

These challenges had already been pointed out bySchwettmann (2006) when he discussed the role ofSSE entities and the Decent Work Agenda (DWA).8

In his opinion, there is a perfect convergencebetween the objectives of the SSE and the aims ofthe DWA, because:

� the values and principles upon which SSEenterprises are based include respect for thefundamental principles and rights at work(rights);

� in a number of countries, the SSE providesemployment to more than 10 per cent of theeconomically active population (employment);

� SSE enterprises have long proven their uniqueability to extend social protection and socialservices to people and communities not coveredby forma social security systems (protection);

� a large number of SSE organizations representthe voice and interests of those who are notnormally represented by the traditional socialpartners, i.e. trade unions and employers’organizations, small farmers represented throughagricultural marketing and supply cooperatives,informal economy operators organized in streetvendor associations, etc. (social dialogue).


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Rights

Employment

Protection

Social dialogue

Local development

Poverty reduction

Fair globalization

Mandate and constituents

SSE

Figure 3.1: The SSE and the DWA

Source: Based on Schwettmann (2006).

7 Conclusions of the European Conference on Social Economy – Toledo, Spain, 2010(http://www.socialeconomy.eu.org/IMG/pdf/2010).

8 DWA reflects the concerns of governments, workers and employers, who together provide the ILO with its unique tripartite identity.DWA is captured in four strategic objectives: fundamental principles and rights at work and international labour standards;employment and income opportunities; social protection and social security; and social dialogue and tripartism. The ILO works todevelop decent work-oriented approaches to economic and social policy in partnership with the principal institutions and actors of themultilateral system and the global economy (http://www.ilo.org).

3.2.2 Trends and instruments

The emergence of SSE policies initiates a phase ofbuilding a new model for the relationship betweengovernment action and civil society. The idea of“policy in progress” is related to the fact that theseare recent experiences with “experimental”methodologies which are applied heterogeneously.On the other hand, there are great challenges inmaking public policies for the SSE effective, giventheir institutional fragility and vulnerability in relationto political conjunctures (França Filho, 2006).

Box 3.3: Public policies for the

SSE: Heterogeneous actions

Based on analyses of international experiences,public policies for the SSE generally encompass:

• actions for professional qualification forinformal segments;

• conventional initiatives to disseminatemicrocredit;

• promotion of popular cooperativesincubation;

• support for the organization of associativism;

• establishment of SSE public centres.

This “heterogeneity of actions” responds to the fact thatdifferent governments and their agencies are diverse intheir understanding and recognition of this topic.9

Box 3.4: SSE issues to be

addressed

This raises some issues, such as the onesenumerated by Schiochet (2006):

• How to institutionalize the SSE ingovernmental structures

• The centrality and interfaces of the SSE inother policies

• How to “territorialize” government action

• How to establish permanent and effectivemechanisms for SSE participation in policymanagement

Given the character of building and experimentationin such policies, it is possible to identify some publicpolicy instruments for the SSE:

� Training, basic education and professionalqualification

� Technical advice and assistance for theestablishment, incubation and consolidation ofenterprises within the SSE

� Development of and access to appropriatetechnologies

� Access to solidarity credit and financing� Definition of legal and regulatory frameworks� Definition of governmental structures, at different

levels, for SSE action� Definition of specific and transverse programmes

and policies for the SSE� Constitution and organization of supply (logistics

and infrastructure) and demand (publicpurchases and market) on the sector's production

These numerous instruments reveal the different“formats” in which public policies for the SSE havebeen designed and implemented internationally.Although this theme still needs more reflection, it


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A social enterprise in tourism and cultural services inGenoa and in Liguria

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9 It suffices to analyse the place which the SSE occupies in some governmental structures. As França Filho observed (2006:264): “thelevel of conception and structuring in a solidarity economy policy depends directly on the sensitivity of the managers involved, who,on their turn, are directly influenced by the level of organisation in social movements”.

can be foreseen that public policies for the SSEdiffer in terms of:

� policies that affect SSE organizations directly intheir legal and normative impositions, such asthose that establish cooperatives and mutualsocieties;

� macroeconomic (fiscal and financial) policies thatprivilege SSE organizations, allowing for, asexamples, subsidized interests and easier accessto credit;

� policies designed to be implemented at differentgeographic levels (i.e. local, regional and/ornational);

� policies designed to activate certain sectors ofthe economy and/or specific groups, such aspolicies to foster agriculture, low-incomehousing, youth employment generation, etc.

In many cases, as it will be seen, parts of thesepolicies are not even considered as such; they arejust supporting instruments/mechanisms for certainSSEOs.

For a systematized view on these instruments,Neamtan & Downing (2005) suggest four majorcategories for public SSE policies:

1) Territorial policy: This aims at supporting localcommunities to create networks, strategicplanning processes and collective projects.Some examples include Spain´s CommunityStrategic Guidelines; the United Kingdom’sCommunity Interest Company; the UnitedStates´ Low-profit Limited Liability Company;Quebec´s Local Development; Australia´sRegional Partnerships Programme; and BrazilLocal.

2) Generic tools for development: These areemployed to allow access to suitableinvestment tools, adequate markets, researchand development and tools to help ensureefficient management practices and training andmanagement systems.

3) Sectoral policies: These policies support theemergence or strengthening of particulareconomic sectors (including the environment,

personal services, housing, new technologies,communications, tourism, food services, cultureand many others) and are important tools forthe development of the SSE.

4) Policies in favour of target populations: Thesepolicies open up possibilities for integratingcitizens considered unproductive into the workforce and make it possible to support thesocio-economic integration of target groups(e.g. youth, the disabled, recent immigrants).Some examples include Mexico´s PriorityGroups Assistance Fund; Senegal´s EconomicInterest Groups and South Africa´s SecondEconomy.

3.3 Constructed from thebottom up

To be more effective, a fundamental aspect of publicpolicies for the SSE is that they must be constructedbased on “co-production”; that is, they must beconceived as a result of citizens' collective action.Governments do not have the same capacity as civilsociety actors to identify emerging needs and newpractices to promote integrated development.

Box 3.5: Public SSE policies:

Bottom-up idea

For successful public policy to emerge,government must play a role in supporting andallowing social economy actors to define theirpriorities and to negotiate the nature and thescope of government interventions in the fieldof the social economy. This process ofco-production of public policy is an inevitablepart of the challenge in identifying appropriatepolicy. (Neamtan & Downing, 2005: 19).

In other words, this should not be seen as theproduct of a “public” construction, but “as the resultof processes of interactions between associativeinitiatives and public policies” (Laville, 2006:27).These are policies that must be designed based on“reciprocal interactions” from “the bottom up”, as


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they suppose a dynamic relationship with civilsociety. Civil society organizations have anaccumulated knowledge of the SSE practical realityand can increase the scale of their activities basedon the interaction with the public power either inconceiving or applying public policies to encourage,promote, support, monitor and disseminate the SSE.

This is why effective public policies for the SSEemphasize non-economic dimensions, such asaspects of social organization of groups in theirterritories. These policies represent a specific formof managing actions to generate job and income,since they are founded on a strategic concept ofterritorial development. Public policies for the SSE,when planned and implemented along these lines,are policies for the “organization of society”, withmore extensive socio-productive impacts thatarticulate in a specific territory (França Filho,2006a).

Box 3.6: The SSE and its

territorial impacts

It concerns the attempt to operate newinstitutionalities or territorial regulatoryframeworks, re-signifying the meaning ofeconomic practices that are to function in closerelationship with the very social, political,cultural and environmental life in theirrespective territories. The economic starts tomake sense only in relation to other spheres ofsocial life and as a mode of associativearticulation between local producers andconsumers to avoid exclusion processes.(França Filho, 2006 a: 266).

This planning and implementation profile for publicpolicies is consistent with the territorial policiesdescribed previously. The policies to support localcommunities (to create networks, strategic planningprocess, etc.) refer to policies of local/municipalscope. Examples include:

� Brazil: Oportunidade Solidária [SolidarityOpportunity], created in 2001 by the Departmentof Development, Labour and Solidarity of thegovernment of the city of São Paulo, and theDiretoria de Economia Popular e Solidária [Officeof Popular and Solidarity Economy], establishedby the municipal government of Recife

� France: the implementation of SSE policies inRennes and Nantes

� Canada: the important Canadian CommunityEconomic Development Network, a localprogramme to generate economic opportunityand enhance social conditions in thecommunities

� United States: the New Market Tax Credit, whichprovides credit for community investors

� Australia: the Area Consultative Communities,which work to “find local solutions to localproblems” as part of the regional PartnershipsProgramme

� New Zealand: the Community EconomicDevelopment Action Research Project, whichformulates local community projects.

3.4 Transverse actions

The SSE has a transverse character; that is, it canmobilize different areas of public action. In additionto its economic objectives (generation of job andincome), social objectives (improvement ofsociability conditions, strengthening of territorialties) and political objectives (creation of publicspaces for problem discussion and solving), the SSEcan mobilize a cultural and environmentaldimension.10

In fact, this transversal character is not fully effectivein today's reality because there is a lack ofarticulation among government agencies at differentlevels. There are many reasons for this, includingmere ignorance, political disputes and institutionalfragility. The very novelty of the topic also matters,for it needs to be better explored by policy makersand the society as a whole.


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10 As França Filho (2006 a:264) says: “It is in this sense that solidary economy projects can be and are undertaken by differentgovernment departments, involving different themes, such as environmental education, transportation, sport and leisure, housing,food security, etc.”.

However, it is possible to identify some experienceswith sectoral policies in which actions based on SSEprinciples have been carried out to achieve othersocial and political objectives. In Canada, forinstance, the Cooperative Development Initiative is ajoint federal government cooperative activity that, inpartnership with regional organizations, providessupport for the establishment of cooperatives to actin priority areas, such as health care, home care,integration of immigrants, environmental challenges,etc. (Neamtan & Downing, 2005). A number ofgovernments provide support to develop SSEentities that generate jobs: in the European Unionfor recycling and rendering of social services; inNigeria for education (Programme Décennal pour Le

Développement de L´Éducation [DecennialProgramme for the Development of Education]); inSenegal for housing (Bureau d'Assistance aux

Collectivités pour l'Habitat Social [Office for AssistingCooperative Housing Projects]); and in Brazil forsocio-environmental sustainability (the approval ofthe National Policy on Solid Waste in 2010).

3.5 Possibilities of“emancipation”?

Another topic currently receiving a lot of attention isthe potential for the emancipation of marginalizedsectors after the establishment of businesses basedon the SSE. An example of this is seen intransforming cash transfer programmes into“emancipatory” programmes.

Over the last ten years, programmes of conditionalcash transfer have aimed to alleviate poverty andbreak its intergenerational circle.11 Theseprogrammes usually provide cash transfer to poorfamilies, conditional on children attending schooland on children and pregnant women undergoingregular medical check-ups.

Soares et al. (2006) state that “these programmeshave existed for decades and have passed throughinnovations and expansions since the end of the1990s”. These innovations are related to morerecent initiatives, which emphasize a new dynamicway to tackle poverty based on providing supportfor beneficiary families so that they find “exit doors”,or are “emancipated”, from their current state ofpoverty. For Soares & Britto (2008), this approachwould imply integration with other policies andprogrammes derived from a strategy for moreextensive development that would includeeconomic opportunities, empowerment andactivities to generate job and income.

In the international ambit, more conclusiveinvestigations on the impact of such programmesare ongoing. In one example in Brazil, however, onecan foresee that within the SSE, there is a favourable


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Farm workers harvesting guava, Kurunegala District, Sri Lanka.

ILO

/P

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raY

.R.

11 Examples of these programmes are: Programa Bolsa Família [Family Allowance Programme] in Brazil; Red Solidária [SolidarityNetwork] in El Salvador; Tekoporã in Paraguay; Chile Solidário [Solidarity Chile] in Chile; Oportunidades [Opportunities] in Mexico;Bono Solidário [Solidarity Voucher] in Ecuador; and Famílias en Acción [Families in Action] in Colombia.

environment to attain policies and practices thatmeet the idea of beneficiaries’ “emancipation”(Morais & Bacic, 2008; 2009).12

3.6 The SSE in selectedcountries

Building and strengthening supporting publicpolicies is fundamental in the SSE. It is important forgovernments to recognize that the advancement ofthe SSE contributes to the socio-economicdevelopment of a country.

While it is not possible to discuss the whole range ofexperiences in public policies for the SSE in theinternational arena, we present here some examplesfrom selected countries.

3.6.1 Africa

Given the history of poverty and social exclusion, aswell as the urgency in development projects in aregion marked by serious social, political, cultural,ethnic and racial conflicts, SSE practices are ratherrelated with philanthropy and actions ofnon-governmental organizations (NGOs). However,today in some countries, there are advancementsconcerning the planning of socio-economicdevelopment projects that prioritize peace, democraticparticipation, governance and regional cooperation.

Box 3.7: The SSE and

international recognition

The social economy is absolutely vital to therecovery of African economies. (...) Itsimportance is derived instead from thedistinctive social goals and rationale of thesocial economy.13

- Ebrahim Patel, Minister of EconomicDevelopment, South Africa14

Most governments support some aspects of the SSEand have developed policy and legal frameworks fortheir promotion. For example, in Anglophone Africa(Kenya, Tanzania and Uganda) there are policies tosupport the development of the cooperativemovement and mutual benefit associations toprovide health insurance. These countries have alsodeveloped cooperative laws and have agencies toregulate the development of the cooperativemovement.15 There are no specific policies for thedevelopment of mutual benefit societies,community-based organizations and socialenterprises in Anglophone Africa, but theirpromotion is addressed in other broader policies oncross-cutting issues like poverty alleviation, gender,health promotion, environmental conservation, etc.There are also various government departments thatsupport the development of these organizations.

Some countries, such as Mali, Nigeria and Senegal,have incorporated a commitment to develop the


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12 It is recommended to read the studies by the International Poverty Centre at http://www.undp-overtycentre.org/, and specifically forthe Brazilian case, data from the Sistema de Informações da Economia Solidária–SIES [System of Information on Solidarity Economy]of the Secretaria Nacional de Economia Solidária–SENAES [National Secretariat of Solidarity Economy] athttp://www.mte.gov.br/ecosolidaria/secretaria_nacional.asp

13 This recognition appears also in the “Outcomes of the Preparatory Meeting of Experts on the 1st African Decent Work Symposium on‘Together addressing the implications of the financial and economic crisis on Africa’s people”: “The constituents should use thepotential of the social economy in creating alternative livelihoods, providing micro-finance solutions, boosting fair trade andestablishing solidarity-based protection” (Addis Ababa, 2009), according to material compiled by Poorter (2010).

14 ILO Regional Conference “The Social Economy – Africa’s Response to the Global Crisis”, Johannesburg, 19-21 October 2009.

15 Further information at: www.ilo.org/coopafrica

SSE in their government structures.16 Mali, forexample, created the Department of EconomicSolidarity and, since 2003, has been counting on thesupport of a national network for the research anddevelopment of strategies for the SSE called Réseau

National d’Appui à la Promotion de l’Économie

Sociale et Solidaire (RENAPESS) [National Networkfor the Promotion of the Social and SolidarityEconomy].17

Based on the objectives of the National PovertyStrategy, Senegal, through its Ministère de la

Solidarité Nationale [Ministry of National Solidarity],develops programmes to reduce poverty andgenerate employment and wealth based oncollective, collaborative and sustainable values. Inthe same manner, Nigeria develops the “EconomicEmpowerment Development Strategy”.

In North Africa, countries such as Algeria, Moroccoand Tunisia count on SSE projects. Tunisia´s“Program for Tomorrows”, which was launched in2004, prioritizes organizations that promote the“approach to solidarity”. In Tunisia, solidarity andparticipant efforts by the government and civilsociety aim to build mechanisms to face poverty,exclusion and inequality.

Box 3.8: Tunisian Solidarity

Bank

Founded in 1997, the Tunisian Solidarity Bank(BTS) is a microfinance institution establishedby Tunisian President Ben Ali to finance privatemicro-projects in Tunisia. BTS approves loansof up to US$9,500 with a maximum annualinterest rate of 5%, a loan repayment scheduleof up to seven years and a flexible grace periodof three to twelve months.18

In Morocco, Solidarity and Development, Morocco(SDM) is a local association established in 1998 byvolunteers to mobilize the skills of every person tolaunch a solidarity network among the inhabitants ofdiscriminated districts. The Government of Moroccoconsiders the SSE to be a key strategy to fightpoverty and social exclusion and to improve livingconditions. The department of the social economywithin the Ministry of Economic Affairs established astrategic policy framework that takes into accountthe transversal, multisectoral nature of the SSE andits regional and local characteristics. Governmentpolicy recognizes the importance of respectingregional priorities. Government programmessupport revenue-generating initiatives throughfunding and accompaniment. Other measuresrelated to evaluation, adapting the legal framework,promotion and international cooperation are part ofthe government’s strategic SSE initiative.

3.6.2 Arab States

Many in the Arab region have enjoyed periods ofstability that have supported socio-economicdevelopment and dialogue, while others (such asIraq, Lebanon and the occupied Palestinian territory)have suffered from social and civil unrest whichjeopardize sustainable economic progress andsocial development. While most enterprises suffer intimes of conflict, the cooperative form of enterpriseshas demonstrated its resilience to economic crises,as cooperatives “aggregate the market power ofpeople who on their own could achieve little ornothing, and in so doing they provide ways out ofpoverty and powerlessness” (Birchall and Ketilson,2009, apud Esim & Omeira, 2009). In particular,people in rural areas can establish cooperatives toshare risks, pool resources, accumulate savings andprovide credit. Despite the potential of cooperativesto respond to the social and economic goals of theirmembers and of society, the development ofcooperatives in Arab States has faced manyobstacles.


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16 We recommend the reading of the already mentioned document, ILO Regional Conference, “The Social Economy” (2009), chapter 4.

17 Further information at: http://www.ccednet-rcdec.ca/?q=en/node/927

18 http://www.microcapital.org/microcapital-story-tunisian-solidarity-bank-bts-receives-african-banker-magazine-trophy-for-micro-credit-bank-of-the-year/

Box 3.9: The SSE in Arab

countries

Reducing urban biases in economic policiesand shifting focus to supporting ruralemployment generation, through mechanismssuch as cooperatives, can support women andmen in these communities to enhance theirlivelihood options and to improve the quality oflife for their families and communities. Anenabling environment for cooperativesnecessitates better contextualized cooperativelaws, facilitating the establishment ofcooperative federations, encouraging relatedresearch and data collection, and legal andeconomic literacy on cooperatives for localcommunities. Support for cooperatives,however, needs to be on the basis of equaltreatment with other forms of organizations, toprotect cooperative autonomy andindependence. (Esim & Omeira, 2009).

3.6.3 Asia

In Asia, the SSE is commonly referred to as the“people’s economy”, “compassionate economy” or“solidarity-based economy”. The first Asian SSEforum was held in the Philippines in 2007; itgathered delegates from more than 26 countrieswho were seeking articulation to favour an Asiansolidarity economy and inclusion in the politicaldecisions of their countries (Tremblay, 2009).

Among Asian countries, Bangladesh is aninternational reference regarding microcredit andforms of access to financial resources for thelow-income population. Grameen Bank19 is anexemplary case, successful and world-known for theuse of microcredit as a way to reduce poverty andgenerate opportunities for millions of socially andeconomically vulnerable people. This experiencehas been disseminated in other parts of the world,serving as inspiration for the planning of publicpolicies in the field of the SSE.


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Rural cooperative (supported by the ILO) gathering women from the district of Lahore, Pakistan.

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19 http://www.grameen.com

In Japan, the SSE covers social enterprises,community business and non-profit financeincluding the microcredit system, fair trade,promotion of the local and neighborhood economy,advocacy for social regulation of the market system,etc. Through the “lost decade” of the 1990s, thisnew style of economic practice has developedenormously and resulted in the 1989 Law onNon-profit Organizations (NPOs), which for the firsttime officially recognized NPOs/NGOs as legalsubjects. Since then, NPOs in Japan and theiractivities have been increasing constantly(NISHIKAWA, 2010).

3.6.4 Europe

In recent decades in Europe, there have beeninnumerable examples of public policies directed tothe SSE. This reflects the SSE’s visibility and socialand political recognition by policy-makers, whoacknowledge its importance for themultidimensional (i.e. economic, social, democraticand cultural) development of their countries.

These policies are heterogeneous as a result of thedifferent national contexts (political, economic,historical, social, cultural and institutional) in whichthey developed. According to Chaves (2002), publicSSE policies in Europe can be divided into five maintypes:

� institutional: recognition of the SSE as a socialactor and dialogue;

� dissemination, education and investigation:

production of knowledge and dissemination ofthe sector;

� financial: availability of funds to finance projects;� support: technical information, assistance etc.;� demand: provision of services contracted by the

public administration and rendered to the society.

Although there is still a lack of consensus inconceptualizing the SSE and defining its entities, it isinteresting to observe that the SSE generated more

than 11 million jobs in the European Union from2002–2003,20 a number that certainly is even greatertoday.

In many European countries, regions activelysupport the SSE. The regional approach is facilitatedby the decentralized management of the EU fundsfor regional development and social cohesion. Theregions normally fund support structures andspecific initiatives to promote the social economy. InSpain, regions can even improve with specificlegislation to supplement the national cooperativelaw. In Andalusia, the regional government hassigned a pact with the social economy organizationsand the trade unions. This is replicated by localpacts in Seville and Cordoba. Support forinnovation, training, investments, interest rates,credit guarantees, access to land and facilities aswell as support to social enterprise are concretemeasures of the pact. In Northern Ireland, theregional government has a strategy for 2008–2011 tosupport the social economy developed inpartnership with the Social Economy Network. Thestrategy is focused on local development and socialenterprise in cooperation with the public sector andprivate business. In France, the PACA region isillustrative; its Progress programme covers 20support measures such as start-ups, solidarityfinance, microcredit, workers buy-out, mentoring,experimentation and development agents.

The social economy in Spain has its ownconsolidated definition, besides a high degree oflegal, economic, political and social recognition(Barea & Monzón, 2002; Montolio, 2002).21 In 2010,the government approved the Proyecto de Ley de la

Economía Social [Social Economy Bill], whichrecognizes the importance of promoting, stimulatingand developing social economy entities and theirmost representative organizations. The main goal ofthis Act is to establish a legal landmark to providegreater visibility and legal and institutional securityfor the sector, reiterating its economic and socialrecognition.


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20 Research carried out by Ciriec – International Centre of Research and Information on the Public, Social and Cooperative Economy,commissioned by the European Economic and Social Committee.

21 After a decade of discussions, it was established that social economy comprises “non-market” entities, such as associations andfoundations, and “market” entities, such as cooperatives, worker-owned companies, agrarian processing companies, mutual societiesand other non-financial commercial companies.

France was the first to recognize the SSE in itspolitical and legal structure. In 1983, the Délégation

Interministérielle à l’Économie Sociale

[Interministerial Delegation on the Social Economy]was created and regulated by the Decree n. 81-1125.Since the Decree n. 2010-95, the Delegation hasmerged into the Direction Générale de la Cohésion

Sociale [General Delegation on the Social Cohesion].The new entity is also in charge with social andmedico-social policies and gender equity. In 2001,the Comité National de Liaison des Activités

Mutualistes, Coopératives et Associatives (CEGES)[National Liaison Committee for Mutual, Cooperativeand Associative Activities]22 was founded, with theaim of inspiring the emergence and operation ofcollective organizations, in addition to providingthem with an institutional and legal environment.

The Italian parliament was the first to introduce theexpression “social solidarity cooperative” in 1991,followed by many other European countries such asFinland, Greece, Hungary, Portugal and Spain.

The Swedish local development agencies for thesocial economy (Coompanion) were based on anexperience brought over in the 1980s from GreatBritain (Cooperative Development Agencies) as aninstrument to combat youth unemployment. Thelarge traditional cooperative sector and thegovernment agreed upon the new initiative. Itfocused on small-scale cooperativeentrepreneurship for local development and socialservices. The local and regional authorities becamesupporters, funders and members of the newagencies, and other SSE organizations joined aswell. After a few years, the government programmebecame a permanent budget line. This experiencealso led several regions and local authorities toestablish social economy action plans in partnershipwith the sector.

In the United Kingdom, the British governmentencourages and supports the constitution of “socialenterprises” as businesses run with economic andsocial purposes; they operate in a number of

economic sectors, such as industry, social services,recycling and agriculture, among others. Most of thesocial enterprises make profits and reinvest them intheir own businesses and/or in the communitieswhere they operate. Unlike commercial businesses,they are not driven by the need to produce profit forshareholders and owners, because they arebusinesses with primarily social objectives.

Box 3.10: The SSE in the

European Union

According to the European ParliamentResolution, Social Economy Europe is theEU-level representative institution for the SSE,which was set up in November 2000, under thename CEP-CMAF.23 At the European level, theSSE represents approximately 10 per cent of allEuropean companies (approximately 2 millionundertakings) and 6 per cent of totalemployment. In these times of crisis, it isappropriate to remember that the SSE providesstable jobs – difficult to relocate as a result oftheir territorial anchorage – and provides anopportunity to reintegrate vulnerable groupsinto society and working life.24

3.6.5 Latin America and Caribbean

In this region, the importance of the SSE and itspractical actions are growing. More recently,government policies in this field have been plannedas a mechanism to face unemployment, poverty,social exclusion and inequality, which are structuralcharacteristics of the region.

By 2003 in Argentina, there were a growing numberof programmes to foster the SSE and initiatives tostrengthen the structures that represent itsmovements. Among the main supporting activities,defined as “Commitment for the SSE”, is a system ofregional technical assistance, financial helpprogrammes and an education and qualification


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22 http://www.ceges.org/

23 http://www.europarl.europa.eu/enterprise/policies/sme/promoting-entrepreneurship/social-economy

24 http://www.eutrio.be/social-economy-conference

programme. Government actions also derive fromresources made available by the Act n. 23.427,which created a fund for cooperative education andpromotion and for the promotion of the solidarityeconomy, with a focus on more vulnerablepopulation groups. For these groups, associatedwork cooperatives are seen as instruments of socialinclusion and an answer to unemployment,informality and labour precarization (Vuotto, 2010).

The programme “Manos a La Obra” [Let’s get towork] aims to support local development initiativesin regions with few resources in order to improvetheir socio-economic conditions. Among its maintools are economic and financial support for viableand sustainable production and communityinitiatives; institutional strengthening for theadvisory boards of civil society associations andorganizations; and technical assistance andqualification for their participants.

In Bolivia, the strengths of local initiatives mayprovide alternatives to the conventional forms ofpoverty alleviation. In this country, since theConstitutional Reform by Evo Morales, the SSE hasfacilitated the participation of those normallyexcluded because of age, gender or physicalhandicaps. It offers them the advantages of socialnetworks and paid work, which help them sustaintheir families. Furthermore, the SSE facilitates thereturn of the benefits of work to the community as awhole.

In Brazil, public policies for the solidarity economywere legitimized in 2003, with the creation of theSecretaria Nacional de Economia Solidária [NationalSecretariat for Solidarity Economy] (SENAES), anagency linked to the federal Ministry of Labour andEmployment. SENAES consolidates a long history ofmobilization and articulation in the solidarityeconomy movement. The Fórum Brasileiro de

Economia Solidária [Brazilian Forum for SolidarityEconomy] and the Conselhos Estaduais e Nacional

de Economia Solidária [State and National Councilsfor Solidarity Economy] served as support for itsemergence and strengthening. Consequently, theprogramme Economia Solidária em Desenvolvimento

[Solidarity Economy in Progress] gained power,marking the introduction of specific public policiesfor the solidarity economy at the national level.

Today, SENAES prioritizes the following areas aspublic policies for the sector:25

� development and technical assistance forsolidarity economic enterprises and networks ofsolidarity economy cooperation;

� promotion of local development;� development of solidarity finances;� education of trainers, educators and public

administrators;� organization of the national system of fair and

solidarity trade;� recovery of companies by workers organized into

self-management.

Box 3.11: Public policy to

develop the SSE

Among the programmes developed by SENAESin Brazil, Brasil Local [Local Brazil] encouragesthe organization of companies managed byworkers, making it easier to access supportingpublic policies such as qualification, communitycredit and equipment. This programme isdesigned for the most vulnerable sectors ofrural and urban areas, with a focus on women,youth, traditional peoples and beneficiaries ofincome transfer programmes.

In Colombia in 1998, Act 454 introduced remarkabletransformations in the relations between the Stateand the SSE, especially concerning the functions ofthe new Superintendency of Solidarity Economy, aregulatory agency for the organizations thatcompose it. In 2006, Decree 4588 regulated theorganization and functioning of public policiesrelating to associated work cooperatives, andderogated the Decree 468 of 1990. This meant somechanges in the organizations that represent thecooperative sector, which started to operate jointlywith the Presidency of the Republic, the Ministry of


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25 http://www.mte.gov.br/ecosolidaria/ecosolidaria_default.asp

Social Protection and the Superintendency ofSolidarity Economy (Davila & Medina, 2010).

In Colombia, there is progress in the process ofconcertación [concertation] between the financialcooperative sector and the government toreactivate Coopdesarrollo, which has merged withCoopecentral, creating a programme as a newentity, that operates based on a unifiedtechnological network. Another public policy tooldeveloped in the country concerns the programmeBanca de Oportunidades [Opportunity Bank],which promotes access to credit for citizens withfew financial resources and no access to bankservices.

In Ecuador, the 1998 Constitution linked theeconomy to principles of efficiency, solidarity,sustainability and quality. Some provisions weremade to ensure protection of peasants and smallfarmers. Article 283 starts: “The economic system issocial and supportive; it recognizes the humanbeing as a subject and an end; seeks a dynamic andbalanced relationship between society, state andmarket, in harmony with nature; and its goal is toguarantee the production and reproduction of thematerial and immaterial conditions that make thegood life possible.” Distribution of wealth, fullemployment and responsible consumption areamong its objectives; and economic stability isdefined as the sustainably highest level ofproduction and employment. These principles arevery important to fostering public policies on theSSE.

In Mexico, the advancement of the SSE occurredafter the Federal Act of 2004, conceived to promoteactivities carried out by civil society organizations.Government intervention actions in favour of theseactivities can be divided into four parts: productiondevelopment fund; regional development fund;priority groups assistance fund; and communitydevelopment fund.

Several community initiatives in Venezuela are allbased on endogenous development, operating withthe support of legislation that strengthens social

transformations in the country. This legislationconcerns the Act of Popular Economy andadvocates the idea of integrating its economic,social and cultural potential in favour of localautonomy and generating collaboration networksbetween production and consumption activities.

The Banmujer, the Institute for Rural Development,and the Institute for Cooperative Education werecreated as a result of this legislation. According tothe legislation, the Solidarity Exchange Groups havebeen established “to develop practices ofsolidarity-based exchange of goods, services andknowledge to stimulate a communal identity andsocial relations inside the communities, strengthenthe communities in their relation to the publicinstitutions and develop sustainable productionprojects, especially food production”.26 Moreover,one of the greatest innovations brought about bythis legislation was the introduction of a “newcommunal currency” that circulates exclusivelyamong Solidarity Exchange Group members.

3.6.6 North America

This region, especially Canada, shows the importantrole of an organized civil society in creatinginnovative strategies for socio-economicdevelopment and dynamization of degradedterritories.


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Rice farming in the Kandal province, Cambodia.

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26 For further information, see: http://venezuelanalysis.com/analysis/4458

Canada has a long history of supporting cooperativedevelopment, particularly in the agriculture sector.In 2004, the Government of Canada launched asocial economy initiative with four components:capacity building; start-up capital for investmentfunds; research; and adaptation of existing SMEprogrammes to the specificities of social economyenterprises. A change in government brought anend to these programmes. The most dynamic publicpolicy environment is in the province of Quebec,where the SSE is recognized as an integral part ofthe socio-economic infrastructure. A wide range ofsectoral policies supports its development, includingnon-profit and cooperative housing, early childhoodeducation, homecare, labour force integration ofmarginalized groups and recycling. Access to loansand equity is supported by direct governmentintervention and by fiscal policy.

The SSE is seen as an important part of regional andlocal development. A government action plan,involving eight ministries, was adopted in 2008 andis coordinated by the Ministry of Municipal Affairsand Regional Development. The QuebecGovernment works in close partnership with theChantier de l’Économie Sociale [Social EconomyShipyard],27 a civil society organization made up ofSSE enterprises, social movements and localdevelopment networks.

The United States has no specific policies on theSSE, although it has presented laws forcooperatives. Resources come principally fromprivate sources, membership involvement andmarket activities. However, certain fiscal tools havecreated an enabling environment for the SSE: TheCommunity Reinvestment Act, enacted in 1977 andrevised in 1995, requires financial institutions to helpmeet the needs of the entire community in whichthey do business. This was an incentive for thefinancial institutions to create partnerships with localassociations to manage investment funds thatbenefited many SSE initiatives. A federalCommunity Development Financial Institutions(CDFI) Fund injects capital into local funds thatprovide capital grants, equity investment andtechnical assistance to private and SSE initiatives.

The White House Office on Social Innovation,created by the Obama administration, is exploringnew ways to support social enterprise.

3.7 Key findings

� The SSE is a reality and from the economic,social, political and cultural point of view, the roleplayed by the SSE is significant; its share isgrowing in terms of employment, economicimportance and societal penetration.

� If the initial main concern was theconceptualization of the phenomenon, today’sburning question relates to the relationship withpublic powers.

� It is possible to identify some public policyinstruments for the SSE, including: definition oflegal and regulatory frameworks; definition ofgovernment structures, at different levels, forSSE actions; definition of specific and transverseprogrammes and policies for the SSE; training,basic education and professional qualification;technical advice and assistance for theestablishment, incubation and consolidation ofenterprises within the SSE; development of andaccess to appropriate technologies; access tosolidarity credit and financing; constitution andorganization of supply (logistics andinfrastructure) and demand (public purchasesand market) on the sector's production.

� To be more effective, public policies for the SSEmust be conceived as a result of citizens'collective action (“co-production”).

� The SSE has a transverse character and concernsdifferent areas of public action.

� Meeting the main challenges for a policy andlegal framework supportive of the SSE requires:a major institutional role for the SSE; adequatelegislation, regulations and norms; tools forimpact assessments; better integration of policiesamong different government levels (sectoral andregional); a reinforced dialogue between civilsociety organizations and the politicaldecision-makers.


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27 http://www.chantier.qc.ca/

Further reading

Monzòn, L. (Dir) (2010). Economía Social y su impacto enla generación de empleo: claves para undesarrollo con equidad en América Latina.FUNDIBES / IUDESCOOP,(http://www.oibescoop.org/media/bank/ES_empleo.pdf).

Morais, L., Bacic, M. (2009). Solidarity economy andpublic policies in Brazil: challenges, difficultiesand opportunities in a world undergoingtransformation. Seville: International CongressCIRIEC.(http://direitoacidade.org.br/utilitarios/editor2.0/UserFiles/FileSolidary%20economics%20and%20publik%20policies%20Brazil.doc)

The Social Economy in the European Union (2007) -Centre International de Recherches etd'Information sur l'économie Publique, Sociale etCooperative – CIRIEC.(http://www.socialeconomy.eu.org/spip.php?article420)

Reid, E. L., Torjman, S. (2006). Evaluation framework for

federal investment in the Social Economy: a

discussion paper. Canada: The Caledon Institute

of Social Policy

(http://www.caledoninst.org/Publications/PDF/566ENG.pdf)

Web sites:

� www.oibescoop.org

� www.ipea.gov.br

� http://www.ciriec-revistaeconomia.es/

� http://www.coraggioeconomia.org/

� www.acldq.qc.ca

� www.cecosol.coop

� www.socialeconomy.eu.org/IMG/pdf/2009_05_11_Conference_conclusions_AJ_web.pdf


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Case Study 3.1: Secretaria Nacional de Economia Solidária SENAES

(National Secretariat for Solidarity Economy) – Brazil

Major actors

• Organized workers in collective production projects; popular cooperatives; production, commercialization andconsumption networks; financial institutions dedicated to popular solidarity enterprises; self-managing companies;family agriculture cooperatives; and service cooperatives

• Representatives from the Fórum Brasileiro de Economia Solidária – FBES28 [Brazilian Forum for SolidarityEconomy] and the Conselho Nacional de Economia Solidária – CNES29 [National Council for Solidarity Economy];

The situation

In recent decades, world socio-economic changes have weakened standard work relationships, producing importantconsequences including an increase in informality, labour precarization and unemployment. This deepening crisis hasopened up space for the emergence and advancement of other forms of labour organization, as a result of workers 'need to find alternative sources of income.

What has been done

The space for national discussion and articulation of the SSE was opened at the first World Social Forum (WSF) in 2001in Porto Alegre, RS, Brazil. During the organization of the third WSF, in 2002, in a conjuncture that was leading to theelection of the candidate of the Workers' Party, a national meeting was held to discuss the role of the SSE in the futuregovernment. A letter to the President-elect was written, suggesting the creation of a National Secretariat for SolidarityEconomy, and the first National Solidarity Economy Plenary Meeting was organized. It consolidated a “politicalplatform” (i.e. a set of priorities related to: solidarity finances; legal framework; training; production, commercializationand consumption networks; and the social organization of the SSE and the “empresas recuperadas”) to strengthen theSSE in Brazil. Later, in June 2003, FBES was created, in the same year as SENAES30 in the Ministério do Trabalho e

Emprego [Ministry of Labour and Employment]. The FBES became the interlocutor with SENAES to present demands,suggest policies and monitor the execution of public policies for the SSE.

Today, SENAES’31 activities include supporting and developing solidarity economy enterprises (SEEs), solidarityfinances, local development and popular cooperatives incubators and training programmes. They also work to definethe legal framework and registration of SEEs and their supporting entities in the country. In an effort to measure thesector, the Sistema Nacional de Informações da Economia Solidária – SIES32 [National System of Information onSolidarity Economy], which is engaged in an updating process, has recorded about 22,000 SEEs in Brazil.

Today, the institutionalization of public policies for the SSE is one of the main strategies to consolidate the theme on thepolitical agenda of different spheres of government and to guarantee their presence as policies of State. These jointgovernment efforts have had an amplifying effect on the implementation of specific public policies for the SSE, includingthe promulgation of local and state legislation and the creation of local and state government agencies, such as secretariatsand departments, and the institutionalization of local spaces of interlocution with civil society (such as councils). Theseactions aim at implementing, strengthening and systematizing local and regional policies for the SSE and spaces for socialparticipation and dialogue articulated with other instances of labour and income policies.

What can be learned

We have chosen to focus on the policy environment to illustrate the innovative process of policy formation in Brazilthat involves ongoing dialogue between SSE actors and different levels of government.

SENAES represents advancement in public policies for the sector and is part of the mobilization and articulationhistory of the existing SSE movement in Brazil.


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28 http://www.fbes.org.br/

29 http://www.mte.gov.br/ecosolidaria/cons_default.asp

30 http://www.mte.gov.br/ecosolidaria/secretaria_nacional.asp

31 Ruled by the Decree 5063 of 2004, which includes the fifteen competences of this agency and can be accessed athttp://www.mte.gov.br/ecosolidaria/secretaria_nacional_atribuicoes.asp

32 http://www.mte.gov.br/ecosolidaria/sies.asp


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Case Study 3.2: The establishment of local development centres

(LDCs) in Quebec, Canada

Major actors

• Urban and rural associationist movement; regional and local government; Chantier; members of theCaisse d'Épargne Desjardins [Desjardins Credit Union] and of the Réseau Québécois du Crédit

Communautaire [Quebec Network of Community Credit]

The situation

In the last two decades of the twentieth century, a number of local development organizations wereestablished in Quebec, as a result of the initiative of several social and political actors who were fightingfor the revitalization of their (rural and urban) surroundings, for job posts and income generation andconsequently for better conditions of life.

What has been done

In 1997, the local and regional development policy adopted by the Government of Quebec allowed for theimplementation of a network of local development organizations covering the entire Quebecois territory.The local development centres (LDCs) were conceived and funded by the Government of Quebec with thehelp of municipal governments. These centres offer basic orientation or technical support services to(individual or collective) entrepreneurs starting their activities.

The LDCs manage funds dedicated to developing small businesses. Among these funds, two specificallyfoster the SSE: the Local Development Funds (LDFs) and the Social Economy Enterprise DevelopmentFund (FDEES). The LDFs aim at stimulating local businesses by favouring access to capital to start orexpand traditional or social economy enterprises. However, in some centres, priority is given to SSEenterprises. The FDEES is specifically directed to designing projects of the solidarity economy and tosupporting the creation of sustainable jobs. The resources come from the Government of Quebec and, asof 2002, each LDC can determine the amount dedicated to finance social economy enterprises.

As these local funds are essential instruments for the development of the SSE in Quebec, the LDCs makeuse of supplementary sources of solidarity finance, such as the Social Investment Network of Quebec(RISQ), the financial instrument of the Chantier; Desjardins Credit Union, a financial cooperative withstrong territory ties; and the Quebec Network of Community Credit, established in 2000, which allows forthe grouping of community funds which have been active since the mid-1990s.

What can be learned

Access to financing is one of the central challenges of SSE enterprise development. This case shows usthe creation of financial instruments that allow for the development and consolidation of individual orcollective enterprises that would hardly exist through traditional ways to access credit. It also shows usthat there is a return guarantee on the part of those who received these loans.

This case points to the importance of establishing effective instruments of access to credit for those whodo not have income, but who come up with ideas and projects for the development of sustainablebusinesses with positive impacts on their surroundings. These instruments need to be supported by aninstitutional, legal and regulatory apparatus in countries, regions or municipalities.

Chapter 4: Building the SSEthrough partnerships andnetworking

4.1 Introduction

SSEOs are born out of need and/or out of aspirationsfor a more just and equitable world. Despite theirdiversity, they share certain common characteristicsupon which partnerships and networks are built.

Partnerships and networks are a key success factor forthe development of the SSE. Sustainability of the SSEdepends on its capacity to root itself in community, tomobilize various stakeholders and to build strongalliances with social partners and public authorities.This work cannot be achieved by individual enterprisesor organizations. It requires combined long-termefforts and sometimes pooling of resources. For thesereasons, networks and partnerships are an essentialcomponent of a strong SSE.

This chapter explains the why, what, where and howof partnerships and networks within the SSE acrossthe world. Through diverse examples, itdemonstrates the importance and the potential ofthese collaborative relationships and structures.Their various roles and mandates are explained andillustrated. A partial list of the major new andestablished SSE networks is presented for furtherreference and learning.

4.2 The importance ofpartnerships and networks

SSEOs have demonstrated a strong capacity tocreate constructive and lasting partnerships andnetworks. This is because of their commitment to


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Women Cooperative (project supported by the ILO): in the quarries of Mtongani (Dar Es Salaam), a mushroom andhen house project directed under cooperative form was proposed as an alternative to the stone breakage that used to bethe principal activity of women in the dictrict. The production is then sold in the markets. Picture: Lazia (left), 50 years oldand 6 children, now works at a mushroom cultivation place.

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collaboration rather than competition, to bottom-upcollective initiatives and to responding tocommunity needs rather than financial gain.Adherence to these values creates favourableconditions for the creation of collaborativestructures.

In the 2009 the Organisation for economicco-operation and development (OECD) publication,“The Changing Boundaries of Social Enterprises,”the authors hypothesize that the innate capacity ofSSEOs to create networks is an important factor intheir rapid development:

“Among the explanations put forward (for thedevelopment of social enterprises (note of theeditor)) one in particular attributes the developmentof social ente1rprises to their ability to network or todefine strategies and suitable support structures forthe creation of inter-organizational links which willgrow ever more widespread, solid and articulated

Partnerships and networks are useful for almost alltypes of enterprises and organizations, but they areparticularly crucial for the SSE. What makes them soimportant?

4.2.1 Recognition of specific realities

The primary reason that SSE actors create networksis to gain recognition for their specific characteristicsand their contributions to development. By comingtogether, SSE actors are better able to create theirown identity and resist being forced into silos thatdo not reflect their complex reality. Their keychallenge is to gain recognition for the SSE’s doublemission: the SSE combines social and economicgoals in a world that generally considers economicand social development as two separate endeavors.Thus, despite the fact that SSEOs create wealth andemployment while responding to the needs of theirmembers and the community (social output), theirdual role is rarely fully recognized.

The need to work together for recognition andsupport began over a century ago. The InternationalCooperative Alliance was created in 1895. Today, on

many continents, cooperatives have achievedrecognition as economic actors, but theircontribution to social development has beenignored. In many countries, community-basedorganizations and other associations have gainedrecognition for their contribution to socialdevelopment, but their increasing economic role isusually underestimated or misunderstood. Networksare crucial in promoting the specific characteristicsof the SSE and the many dimensions that itembraces.

In Europe, there are active, establishedrepresentative organizations for cooperatives,associations, mutual society and foundations. Inaddition to these networks based on juridical status,an EU-level representative organization for socialeconomy was created in 2000.

Box 4.1: Social Economy

Europe

Social Economy Europe was created in 2000under the name of European Standingconference of cooperatives, mutual societies,associations and foundations. It aims to promotethe role and values of social economy actors inEurope and to reinforce the political and legalrecognition of the social economy and ofcooperatives, mutual societies, associations andfoundations within the European Union.

www.socialeconomy.eu.org

New networks have been established to representemerging practices in the SSE in Latin America. Inaddition to traditional cooperative structures, strongnational networks of the solidarity economy havebeen created in the past decade in several countriesincluding Bolivia, Brazil, Colombia and Mexico.Some have succeeded in gaining recognition fromgovernments and from social partners.

In Africa, a few national networks are emerging incountries in West Africa and other initiatives arespringing up elsewhere.


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1 The Changing Boundaries of Social Enterprises, edited by Antonella Noya, OECD, 2010.

In North America, both established and youngnetworks and federations exist, including therecently formed US Solidarity Economy Network.

Asia is only beginning to embrace the new SSEvocabulary, but has a long history of cooperativeorganizations.

Box 4.2: A new network for Asia

The first Asian Forum for Solidarity Economytook place in the Philippines in October 2007.Close to 700 delegates from 26 countriesattended. Stakeholders from different sectorsand regions met to articulate a uniquely Asiansolidarity economy as a people- andeco-centred way of governance over theproduction, financing, distribution andconsumption of goods and services.

www.aa4se.com/cms2/

4.2.2 Mapping its economic importance

Another major motivation for the creation ofcollaborative organizations within the SSE is to gainmore visibility and recognition of its power withinnational economies. For decades, statistics havebeen compiled and international standards createdto measure the scope and impact of privateenterprise. Some countries and internationalassociations maintain information systems forcooperatives and mutual societies. The size of thenon-profit sector has been a subject of internationalstudies, but these studies do not identify whichnon-profits carry out economic activities. Manyemerging SSE initiatives, on the frontier of theformal and informal economy, are invisible in officialstatistics. Because of its diversity, the scope andimpact of the SSE as a whole is still impossible tomeasure. By creating inclusive networks, SSE actorsand promoters are better able to map theireconomic importance and demonstrate theircontribution to socio-economic development.

Box 4.3: Mapping the solidarity

economy in Brazil

In 2009, by mobilizing its members and partners,the Brazilian Forum of the Solidarity Economy(FBES) undertook a mapping of the socialeconomy. By involving local and regionalnetworks, the FBES was able to identify 22,000solidarity economy enterprises, of whichone-third have no official legal status and wouldnever have appeared in official statistics. Themapping process is accessible through the FBESportal and is updated in a continuous processthrough members’ participation.

www.fbes.org.br

Because of this lack of visibility, the ILO Action Planfor the SSE, adopted in Johannesburg in 2009, hascalled for the creation of an international observatoryfor the SSE to help map its complex realities.

Box 4.4: Statistical recognition

of the SSE in Europe

Social Economy Europe and its members arecalling for the statistical recognition of the socialeconomy. A resolution of the EuropeanParliament calls on the Commission and theMember States to support the creation ofnational statistical registers for SSEs, to establishnational satellite accounts for each institutionalsector and branch of activity and to allow for thisdata to be collated by Eurostat and by makinguse of capabilities available in universities. (Doesthat edit accurately preserve your meaning?)

http://www.socialeconomy.eu.org/spip.php?article1006&var_recherche=statistics

4.2.3 Responding to specific needs

In addition to the need for recognition, networks andpartnerships serve an important function in helpingSSEOs find answers to their specific needs. Becausethey follow another type of logic, SSEOs can rarelyaccess traditional development tools. Governments’


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economic development policies tend to focus on privateenterprises based on the traditional capitalist model andseek to increase the country’s commercial trade balancewithin global markets, whereas most SSE enterprisesproduce to meet local needs. Management training inbusiness schools and technical expertise is primarilyoriented towards private ownership models. Access tocapital for the SSE is crucial. Yet, existing capital circuitsare closed to SSE enterprises because private investorscannot buy voting shares in cooperatives, mutualbenefit societies and associations nor can they expect amaximum financial return on investment. Throughnetworks and partnerships, SSE enterprises collaborateto create tools that are tailored to their specific realities.

Box 4.5: A partnership to create

a new financial institution in Italy

Banca Etica, the first institution of ethical financein Italy, is the result of a partnership betweenMAG (Self-Management Mutual Associations)cooperative societies (self-management mutualassociations) and 21 non-profit organizations. In1994, they created L’associazione Veso la BancaEtica (The Association Towards Banca Etica). In1995, a cooperative was founded with thepurpose of gathering 6.5 million Euro needed toincorporate a popular bank according to Italianlaw. Following an important fundraisingcampaign in 1998, the Italian Central Bankgranted Banca Popolare Etica the authorizationto begin operations.

Since its creation, Banca Etica has been animportant investor in the SSE and a key player ininternational networks dedicated to financing theSSE. Among the founding members are ARCI(National association of autonomous andpluralist social promotion) and ACLI (Italianworkers Christian Assocation, the two largeItalian NGOs, the social cooperative consortiumCGM (Consortium of Gino Matarelli)and fairtrade and ecological organizations. Banca Eticacooperates on various projects with the financialinstitutions Legacoop and Confcooperative,whose mission is to finance new SSE initiatives.

Box 4.6: A partnership in

favour of the SSE in Central

and Eastern Europe

CoopEst is a new financial initiative for thedevelopment of the social economy in Centraland Eastern Europe. Launched in 2006 througha bond loan of 17 million euro, its foundingmembers include Crédit Coopératif (France),IDES Investissements (France), MACIF (France),CFI ((Italy), SEFEA (Italy), Bank BISE (Poland)and Soficatram (Belgium). CoopEst willintervene through local financial intermediariesand will focus particularly on the productionand commercialization of small-scale handicraftindustries and small business development,especially among unemployed ordisadvantaged groups.

4.3 Forms of collaboration

Collaborative efforts take many different formswithin the SSE. Depending on their objectives,cooperation among stakeholders is expressedthrough the creation of partnerships, networks orfederations.

4.3.1 Partnerships

Partnerships are created as cooperativerelationships among people or groups who agree toshare responsibility for achieving some specificgoal. They can take on many forms and involve awide variety of stakeholders. They are crucial for theSSE, which must be able to draw on a range ofresources and expertise for its development.


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Box 4.7: A partnership between

a municipal government and

SSE actors in Canada

In 2008, the City of Montreal (Quebec, Canada)signed a partnership agreement with socialeconomy actors (Partnership forCommunity-based Sustainable Development)and created a special division within theDepartment of Economic Development for thesocial economy. This partnership recognizesthe social and economic capacity of the socialeconomy to contribute to the city’sdevelopment. The City of Montreal committedto supporting the development of the socialeconomy while SSE actors pledged to increasetheir contribution to improving the quality of lifefor the city’s population in a variety of sectors.

http://ville.montreal.qc.ca/portal/

4.3.2 Networks

Networks are non-hierarchical structures that bringtogether organizations or people with commoninterests or needs. They are often horizontalstructures that link SSE actors and partners in agiven territory.

Box 4.8: Combining efforts to

fight poverty and social

exclusion in Mali

Created in 2005, the National Network for thePromotion of the Social Solidarity Economy(RENAPESS) in Mali is a network that links 57member organizations, including mutual benefitsocieties, cooperatives, associations,microfinance and solidarity finance organizationand other structures of the SSE. RENAPESS’goal is to combine efforts to fight poverty andexclusion and to negotiate public policy infavour of the SSE.

[email protected]

4.3.3 Federations or confederations

Federations or confederations are formal structureswith clear lines of authority and decision-making.They predominate in the cooperative sector as amanifestation of the sixth (cooperative principle,adopted by the International Cooperative Alliance(ICA) the principle of cooperation amongcooperatives. The other six principles are voluntaryand open membership, democratic member control,member economic participation, autonomy andindependence, education,training and informationand concern for the community: The ICA explainsthe sixth principle in the following way“Cooperatives serve their members most effectivelyand strengthen the cooperative movement byworking together through local, national, regionaland international structures.”

Box 4.9: Worker cooperatives

work together at a national

and international level

The European Confederation of Workers’Cooperatives, Social Cooperatives and Socialand Participative Enterprises (CECOP) is aEuropean federation active in industry, servicesand crafts. It affiliates 25 national federations in16 EU countries which represent approximately50,000 enterprises employing 1.4 millionworkers. CECOP also affiliates 3 financialinstitutions. CECOP is the European section ofCicopa, the international organization of workercooperatives.

www.cecop.coop

4.4 Key stakeholders

SSEOs respond to collective needs. Their profitabilityis not measured by financial benefit to individualinvestors but by social return to its members or to thecommunity at large. They mobilize market, volunteerand public resources to achieve their goals. This iswhy a wide variety of stakeholders are involved insupporting the development of the SSE throughpartnerships and networks.


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SSEOs represent the core component ofpartnerships and networks. They are both the majorbeneficiaries and the major players. Their principlemotivation is to gain access to increasedrecognition, resources and opportunities fordevelopment. Their participation is also anexpression of their fundamental values of solidarityand sharing.

National and regional governments are increasinglyinvolved in partnerships in favour of the SSE. Newpublic policy is emerging rapidly at a local, nationaland regional level in Europe and Latin America andin some regions of Africa, Asia and North America.Governments are interested in the SSE because ofits capacity to mobilize resources from thecommunity and within the marketplace to achievepublic benefit. Its capacity to produce innovativesolutions to complex problems has attracted theattention of certain public authorities, who arerealizing that the SSE constitutes a powerful tool forinclusive growth.

Box 4.10: Networking to

support policy-makers and

managers in Brazil

In Brazil, the National Network of SolidarityEconomy Public Policy Managers is a network ofdirectors of social economy policies inmunicipal, state and federal government. Its aimis to widen the discussion on the mostappropriate tools for the different levels ofgovernment to promote and stimulate thedevelopment of the solidarity economy. Thenetwork facilitates participation by civil servantsin the debate on public policy.

www.fbes.org.br

Local development organizations and localgovernments are awakening to the importance ofsupporting SSEOs to revitalize rural and urbancommunities. A recent study in Honduras showedthat regions and municipalities where there is avibrant SSE are obtaining better results in fightingpoverty and improving overall development

indicators than similar regions without a strongpresence of the SSE (El Censo del Sector Social dela Economía, 2003, COHDESSE).

For municipal authorities, the advantages of theSSE are easy to understand. These enterprisescreate local jobs and are owned by communitymembers, and their surpluses circulate at a locallevel. They often answer needs that the privatesector ignores because financial return oninvestment is insufficient. They operate in sectors inwhich public authorities do not have the capacity orthe flexibility to intervene. And they are not for saleto outside investors!

Box 4.11: Municipal authorities

and SSEOs promote the SSE

The European Network of Cities and Regions forthe Social Economy (REVES) is a uniqueEuropean network based on partnership betweenlocal and regional authorities and territorial socialeconomy organizations. Created in 1996, REVESmembers are from 11 countries. Members includelocal authorities or SSEOs that are developing orare willing to develop policies to promote the SSEfor a fair, inclusive, participative and responsiblesociety. REVES is a network that offers socialinnovation in methods and procedures which isbased on co-construction and the sharedcapacities of its members and their territories.

www.revesnetwork.eu

Labour unions in many countries consider that thepath to decent work and economic justice cannot belimited to political action and negotiating goodcollective agreements. They are demandingrecognition as full economic actors with a say in theway businesses are managed, pension fund moneyis invested and economic development policies aredefined. As they become more involved ineconomic development, they are also becomingimportant partners of the SSE. The following threeexamples show how and why labour unions aregetting involved in developing the SSE.


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Box 4.12: Union involvement in

developing the SSE in Brazil

The Brazilian union, Central Unica dosTrabalhadores (CUT), is actively involved insupporting the SSE. Since 2001, CUT hassupported over 100 workers’ cooperativesrepresenting 10,000 members. It also supportsseveral savings and local cooperatives, includingECOSOL, a network of 4,500 members thatmanages US$1.2 million in loans. Thisorganization plays an important role with the CUTto help workers attain financial independence.

www.cut.org.br

Box 4.13: Labour federation

creates a unique financial

institution in Quebec

In 1971, union militants from the NationalConfederation of Trade Unions (CSN) inQuebec, Canada founded a credit union torespond to the needs of local trade unions butalso to contribute to social transformation.Known today as the Caisse d’économiesolidaire, this unique financial institution hasfocussed exclusively on lending to SSEOs withextremely successful financial results. With its2,500 collective members, non-profitbusinesses, cooperatives, community-basedorganizations and unions and its over 7,000individual members, this financial institutionhas played a key role in supporting the SSEand strengthening links between the unionmovement and the social economy in Quebecand internationally.

www.cecosol.coop

Box 4.14: A Latin American

union leader explains his

commitment to the SSE

At a Latin American meeting of solidarityeconomy networks organized by RIPESS-LAC(Intercontinental Network for the promotion ofthe social solidarity economy: Latin Americaand Caribbean section) in Medellin, Columbia,in July 2010, Luis Alejandro Pedraza, Presidentof the Union Nacional Agroalimentaria deColombia (UNAC) and member of the executivecommittee of the Latin American UITA,International Union of Food, Agricultural, Hotel,Restaurant, Catering, Tobacco and AlliedWorkers' Associations made the followingdeclaration:

“UNAC-UITA’s fundamental goal is the defenceand promotion of human rights, the freedom ofassociation, the development and institutionalstrengthening of the rule of law and the pursuitof social justice and peace.

UNAC supports collaboration between tradeunions and agricultural organizations in thecreation and implementation of land reformthrough self-managed agriculture business andcommerce.

We promote alternative forms of organization ofdisplaced farmers, victims of violence andmarginalization, through social enterprisesbased on agro-ecological production, in alliancewith indigenous communities in urban and ruralareas of Columbia. We thus implement thestrategic objectives of the solidarity economymodel through cooperatives and mutualassociations.”

Luis Alejandro Pedraza, July 2010, Medellin,Columbia

Employers associations often include SSEOswithout realizing it! SSEOs create employment andwealth like any other enterprise. In some countries,they have created or acted as employerorganizations and are recognized as such by othersocial partners. In France, social economy structurespresent candidates in the Prudhomale election


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process to represent employers in labour relationsdiscussions.

Because of their concern for economic and socialdevelopment within their country or region, certainprivate sector employers’ associations and certainlarge corporations are offering support for thedevelopment of the SSE.

Box 4.15: An employers’

federation in support of the

SSE in Italy

The Association for the Social Development ofEntrepreneurship (Sodalitas) is a not-for-profitorganization established in 1995 by Italy’s largestemployers’ federation, Assolombarda. Corporatemembers include large multinationals and 90voluntary consultants from the private sector,who work free of charge, part-time, fornot-for-profit organizations includingcooperatives. Sodalitas works as a bridgebetween the for-profit and not-for-profit sectors,and has supported more than 80 not-for-profitbodies. It aims to raise standards in thenot-for-profit sector and to promote linksbetween civil society and corporations,promoting sustainability and social responsibilityand arguing the business case for pursuingthese goals. It also encourages corporateinvestment in social goals and communicatescorporate best practices. It also promotes thesale of goods and services produced by socialcooperatives to corporate members.

www.sodalitas.it

Social movements, including the women’smovement and the environmental movement, havebecome staunch allies and partners of the emergingSSE. Since maximizing profit is not its goal, the SSEhas great potential to reflect true sustainabledevelopment. The World Social Forum, whichbrings together a broad range of social movements,has given an important space to the SSE in itsagenda. The first Women’s March against Poverty,held in Quebec in 1995 and organized by the

Quebec Federation of Women, included support forthe SSE among its eight demands and launched theSSE into the political arena. Women’s organizationsin other countries are attracted to the SSE becauseits basic values and collective forms of ownershipare attractive for many women. Many new SSEentrepreneurs emerge from these socialmovements.

Box 4.16: Spanish social

movements network to

develop the SSE

Spain has a long history of cooperativestructures that reflect the force and the depth ofthe social economy in Spain. But those involvedin new initiatives which emerged from socialmovements saw the need to create anothernetwork. Red de redes de economia alternative ysolidaria (REAS) is a network of networks of thealternative and solidarity economy, comprisingmore than two hundred entities organized inregional and sectoral networks.

Founded in 1995, REAS emerged from acommon need to facilitate and promotesustainable economic alternatives in Spain.Among its initiators were actors from theenvironmental, fair trade and internationalsolidarity movements. REAS members areprincipally organizations and enterprises thathave emerged since the 1980s; they are presentin a wide range of sectors, including recycling,microcredit, environmental education, socialintegration and fair trade.

www.economiasolidaria.org

International NGOs have played an important rolehistorically in supporting the SSE. Many areconvinced that one of the most efficient strategies toachieve the Millenium Development Goals is toempower local communities through sustainableSSEOs, and so many are actively involved inpartnerships with SSEOs.


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Table 4.1: Stakeholders in networks and partnerships

Key stakeholders Interests Obstacles

Social and solidarity enterprises Gain recognition and access toresources and developmentopportunities

Immediate needs and limitedresources take priority overbuilding networks

National and regionalgovernments

Capacity for SSE to produceinnovative solutions tosocio-economic developmentchallenges and to mobilize awide range of resources

Tend to work in silos. Publicpolicies are either economic orsocial. Difficulty in situating theSSE within existing governmentstructures

Local development organizationsand local governments

Contribution of the SSE to localdevelopment: local jobs, localcontrol, local products andservices, circulation of surpluseswithin the community

Lack of knowledge of the SSE.Accustomed to relying onprivate capitalist enterprisesmodels to sustain economicdevelopment

Workers’ organizations Contribution of the SSE toeconomic justice and jobcreation. Strategy to respond toneeds of members

Conception of the role of tradeunions gives priority tonegotiating collectiveagreements and political action

Employers’ associations Contribution of the SSE toeconomic activity and wealthcreation

Perception of the SSE as unfaircompetition

Social movements Contribution of the SSE tofighting poverty and socialexclusion

Hesitation to become involved ineconomic activity for fear ofweakening their political orsocial role

International NGOs Contribution of the SSE toachieving the MilleniumDevelopment Goals

Funding criteria often restrictedto relief work or socialdevelopment initiatives and notto empowering communitiesthrough the SSE

Academic institutions andresearchers

Social innovation within the SSEcreates the possibility to createnew, useful knowledge

Academic institutions do notgive full recognition to the SSEand to working in partnershipwith SSE actors

Box 4.17: The Swedish

cooperative movement

supports the SSE in

Latin America

The Swedish Cooperative Centre a non-profitNGO set up by the Swedish cooperativemovement, works in partnership withorganizations in developing countries to improvethe living conditions of the poor.

Examples of its work include training for(Landless Workers Movement coordinators inBahia, Brazil to manage the land and improvetheir capacity to negotiate with local authorities;empowering women in Bolivia through thecreation of a rural women’s organization tocombat poverty; and supporting a housingcooperative for poor families in Asuncion,Paraguay. The latter project was so successfulthat the Government of Paraguay decided tofinance a more ambitious housing programme.

www.sccportal.org

Academic institutions and researchers, attracted bythe social innovation that is at the heart of most SSEinitiatives, are investing increased resources tomeasure and understand the dynamics of theemerging SSE. They are important partners inhelping to better understand what works, whatdoesn’t work and why. By systematizing andanalysing diverse practices, they create the basis fortraining and educational programmes that are soimportant for the future of the SSE.

Box 4.18: An international

research network on the SSE

The International Centre of Research andInformation on the Public, Social andCooperative Economy (CIRIEC) was created in1947. Its headquarters are in Liège, Belgium andit has branches in 15 countries. Its membersinclude researchers and SSEOs. CIRIEC’s goal isto assure and promote scientific research andpublications on economic sectors and activitiesserving the common and collective good.CIRIEC organizes international conferences onresearch in the social economy.

www.ulg.ac.be/ciriec/

Table 4.1 summarizes the interests and obstaclesfaced by the various stakeholders in networks andpartnerships of the SSE.

4.5 Different types ofnetworks and partnerships

Networks and federations within the SSE are verydiverse and exist at local, regional, national,continental, intercontinental and international levels.They respond to a variety of needs and pursuemany different goals. Some are young and veryinformal; others have become institutionalized overthe years and operate within a formal andsometimes hierarchical structure. Despite thesedifferences, they can be categorized according totheir composition and to the mandates they aregiven by their members.

Territorial networks or federations are generallymulti-stakeholder structures that bring togetherdifferent actors committed to the development oftheir local community, their region or their countrythrough the SSE. They are motivated by theirconviction that the SSE is a strategy that will benefittheir territory. They may be composed exclusively ofSSE organizations and enterprises or they mayinclude representatives of labour unions, socialmovements, foundations, researchers, local


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A small group of social coops in a a very beautiful cornerof Sicily.

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associations and even government. They are ofteninvolved in strategic initiatives that call on a widevariety of actors to support the development of theirterritory.

Sectoral networks bring together SSE enterprises ororganizations involved in one specific sector ofactivity, such as agricultural cooperatives, healthmutual benefit organizations, financial cooperatives,microcredit institutions, community radios or socialtourism. The members of these networks aremotivated by the need to develop their enterprisethrough collaboration with similar organizations andthrough the reinforcement of the entire sector. Theiractivities are often concentrated on supportingbetter management practices and creating commontools and enabling conditions for the developmentof each enterprise or organization.

Juridical-based networks or federations bringtogether enterprises that have a common legalstatus. Networks or federations of cooperatives,mutual benefit and non-profit organizations co-existin some countries with little or no collaboration; inothers they are actively engaged in promoting anddeveloping a broad vision of the SSE. In countriesthat have created a new specific legal framework,social enterprise networks are emerging.

Case Studies 4.1, 4.2 and 4.3 at the end of thischapter provide examples of effective networks.

4.6 Networks’ roles andfunctions in supporting theSSE

Networks emerge as a response to needs thatcannot be met by an individual enterprise ororganization. The members of the network identifytheir common needs and build the type of structurethat can best reply to these needs. Some networkshave a very limited mandate, which is often linked tolimited resources. Others are more structured with

considerable resources and take on moreoperational activities, including direct services tomembers. The main functions of SSE networks aredescribed below.

Representation, promotion and advocacy

Gaining recognition for the SSE’s current andpotential contribution to development is a majorchallenge. This is true at a local, national andinternational level. It is not surprising that mostexisting and emerging SSE networks are involved inpromoting the SSE, representing its interests withother social partners and negotiating public policy.The following two examples show how advocacycan be carried out by networks from a sectoral and aterritorial perspective.

Box 4.19: International

networking of community

radios

Through service to members, networking andproject implementation, the World Associationof Community Radio Broadcasters (AMARC)brings together a network of more than 4,000community radios, federations and mediastakeholders in more than 115 countries. Themain global impact of AMARC, since its creationin 1983, has been to accompany and supportthe establishment of a worldwide communityradio sector that has democratized the mediasector. AMARC advocates for the right tocommunicate at the international, national, localand neighbourhood levels and defends andpromotes the interests of the community radiomovement through solidarity, networking andcooperation.

www.amarc.org


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Box 4.20: A national network

rooted in territory in Brazil

The Brazilian Forum for the Solidarity Economy(FBES) is a young and vast network that isrooted in local and regional forums. The FBESwas officially created in 2003 after a process ofmobilization and social dialogue with the newlycreated National Secretariat for the SolidarityEconomy (SENAES) within the Brazilian federalgovernment. Twelve national organizationsrepresenting national networks promoting theSSE and social movements complete itsnational coordination committee. Public officialsworking within local governments to supportthe solidarity economy are also part of the local,regional and national structures.

The FBES maintains communication amongmembers through a dynamic portal andorganizes national meetings on a biannualbasis. They are recognized and supported bythe Brazilian government and represent thesector in the National Council of the SolidarityEconomy, created by the SENAES.

www.fbes.org.br

Common services

Many sectoral and some territorial networks offerdirect services to their members. Training, technicalsupport, promotion, marketing and other businessservices are the most frequent services developedby SSE networks.

Box 4.21: Mutual societies

benefit from working together

The Union Technique de la Mutualité Malienne(UTM) was created in 1996 in order to providesupport to mutual health organizations (MHOs).Today, 32 MHOs with a total of 40,000beneficiaries are members of the UTM. Theservices offered include support for thedevelopment of new MHOs, feasibility studies,monitoring, representation with governmentand ensuring an enabling legal and regulatoryframework. The UTM launched its own product,voluntary health insurance which has attractedmany members from urban areas.

www.ecosoc-afrique.org/utm.htm

Exchanging expertise

Many managers or administrators of SSEOs feelisolated or misunderstood by established businesssupport services which orient them towards moretraditional for-profit models. Therefore, many SSEnetworks come together to learn from each other,because they all share a common goal of combiningsocial and economic objectives to achieve resultsfor their members or the community. Networks arealso being created for government or other partnersinvolved in the SSE.

Box 4.22: A network to learn

from others

In Poland, where recognition of the SSE is onlybeginning, actors in the region of Malopolskiecreated the Social Economy Pact (MSEP) in2007. The Pact began informal operations in2007 and was officially signed by 25 entities in2008. The MSEP facilitates the exchange ofinformation but has no role in decision-makingor power-sharing.


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Creating new development tools

Most SSEOs have great ideas and huge ambitionsfor their members or communities; however, theyall do not have the capacity to carry them out ontheir own. SSE networks can be important strategictools for scaling up because they can providepooled resources and ideas to carry out majorinitiatives. The most common development toolsemerging from SSE networks include thedevelopment of new financial instruments,information networks and strategic partnerships withfunders or governments. Some SSE networks aremapping the SSE in their communities. Others arecreating tools for e-commerce.

Box 4.23: A multi-stakeholder

partnership in Quebec

The Chantier de l’économie sociale in Quebec,Canada is a network of networks made up ofcooperatives, community-based organizations,social movements and local developmentorganizations. Through this multi-stakeholderpartnership, the Chantier has created a10,900,000 euro loan fund for collectiveenterprises, a $39M euros patient capital fund,an information and networking portal, acollaborative research partnership andlabour-force development tools. It hasnegotiated important public policies in supportof the SSE with the Quebec and Canadiangovernments.

www.chantier.qc.ca

Improving access to markets

Improving access to markets has been one of themost common roles for networks within thecooperative movement, but it is also being taken upby other types of networks. Many cooperativefederations, particularly of producer cooperatives,were created with this specific purpose. Over theyears, they have created strong institutions tosupport this function and are active in global

markets. Emerging networks often focus on fairtrade principles and circuits. There is a growingtrend towards increased “business-to-business”transactions among SSE enterprises as anexpression of common values and interests.

Box 4.24: Accessing markets

through networking in Burkina

Faso

The Union des groupements de productrices deproduits du karité des provinces de la Sissili etdu Ziro (UGPPK-S/Z) is based in Léo, BurkinaFaso. The Union of Léo brings together 2,884women members scattered in 67 groups from39 villages and sectors. A partnership with aCanadian NGO (CECI) trained 1,800 womenproducers on improving the quality and hygieneof their butter. Moreover, 40 local womenfacilitators and 596 women harvesters of sheanuts were trained on harvesting techniques andon processing and preservation of the nuts.

In 2007, this Union produced 102 tonnes ofbutter, of which 95 tonnes were exported toCanada and France, whereas in 2001 they onlyhad exported 5 tonnes. Their current totalproduction capacity is estimated at 250 tonnesper year and could amount to 500 tonnesbefore 2011.

www.afriquekarite.com

Conducting research and creatingknowledge

The SSE is a laboratory for social innovation. Thiscreates many challenges, including the need tobetter understand the SSE and how it works. Torespond to this need, networks of researchers,working in partnership with SSE actors, play astrategic role in creating new knowledge. Thisknowledge is essential to the development of theSSE.


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Box 25: Collaborative research

in Canada

The Canadian Social Economy Hub, based at

the University of Victoria in British Columbia,

Canada, was created in 2005 with the support

of the Social Science and Humanities Research

Council. It is a partnership among over 300

researchers and hundreds of SSE practitioners

and their community partners. The hub acts as

a facilitator in promoting collaboration among

six regional research centres and creating

opportunities and exchanges with

international networks. Over 200 research

projects have been carried out and numerous

publications, conferences and training events

have been organized, including tele-learning

sessions.

www.socialeconomyhub.ca

Strategic planning on a local, regionaland/or national level

Developing the SSE is not an overnight miracle; itrequires a long-term vision and a strategic plan thatallows different stakeholders to work togethersuccessfully. Some SSE networks have been verysuccessful in winning support because of theircapacity, through local or national plans, todemonstrate the contributions of the SSE to thesocio-economic development of their community.

4.7 Building an action plan

An action plan for the SSE cannot be built by oneperson or organization nor can it be a theoreticalexercise prepared by outside experts. The processof building an action plan is almost as importance asits contents. To produce significant results, an actionplan must be rooted in community mobilization andmust draw upon a wide variety of skills and


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Network of SSEenterprises by sector

Localdevelopment

networks

Regional SSEpoles

Socialmovements

Tradeunions

Loan and technicalassistance fund

DEVELOPMENTTOOLS

Private sector

PARTNERS

Chantier de l économie socialQuébec national SSE network)

Labour unions Government Researchers

Patient capitalinvestment fund

Communityuniversities research

partnerships

Labour forcetraining committee

Governmentof Québec

Figure 4.1: Members of the Chantier de l’économie sociale

resources. The following suggested steps forbuilding an action plan are based on severalsuccessful experiences by SSE networks:

1) Map the SSE: Even though the concept of theSSE may be new, chances are that SSEOsalready exist in the area. Who are they? Arestatistics available on their role in the economy?What sectors do they cover? What impact dothey have? What are their strengths andweaknesses?

2) Review the development challenges: The SSEis a means to respond to community needs. Anaction plan must aim to increase the capacity ofSSEOs to respond to these needs. What majordevelopment challenges face the community?

3) Analyse SSE’s potential role in meeting these

challenges: The SSE can be an effectivestrategy to respond to many, but not all,challenges. Where can the SSE be mosteffective in answering key societal challenges?Is it possible to consolidate and expand existingorganizations to take on new challenges? Whatnew sectors have potential for development?

4) Determine what is required to create an

enabling environment: SSEOs requiredevelopment tools and public policies adaptedto their specific realities. Which tools arerequired for the SSE to answer the challengesidentified? What already exists and where arethe gaps? Possibilities to consider includecommunity mobilization, financial instruments,access to markets, public policy, networks,training, collaborative research and technicalassistance.

5) Identify the key stakeholders: Many people ororganizations in an area share a commoncommitment to community development andcan contribute, directly or indirectly, to theadvancement of the SSE. It is important toestablish a dialogue with the greatest number ofstakeholders and identify the arguments thatwill convince them to become involved, even ina modest way.

6) Develop long-term goals and priorities: This isthe most exciting step: visioning the future forthe community with a thriving SSE. How do wesee its role in the next decade? What sectorswill have developed? What outputs will it havecreated? What are the priorities in this overallvision?

7) Develop short-term goals and priorities: Themost important criteria in establishingshort-term goals and priorities is their capacityfor success. It is better to target three to fivepriority goals and succeed! Positive results, nomatter how modest, create the conditions tocreate more ambitious goals and a longer list ofinitiatives. They help convince the sceptics andattract new partners and funders. Rememberthat even in the SSE, success builds on success.

8) Coordinate and monitor the plan: In an idealsituation, all stakeholders should be involved incoordinating and monitoring theimplementation of a local or national plan. Insome communities and countries, civil societyand public authorities work together every stepof the way. The coordinating body must havethe moral authority to question the variousstakeholders and to encourage them to meettheir commitments to implement the plan. If not,there is a danger that the plan will be only atheoretical exercise.

9) Evaluate progress: We can measure thenumber of organizations and enterprises, thenumber of jobs, the quantity of products orservices sold or delivered, the generatedsurpluses, the number of beneficiaries.Qualitative evaluation must answer questionsthat are important to improve practice, such asthe quality of services or products or theefficiency of governance and managementpractices within the SSE. Participatoryevaluation, involving managers, beneficiariesand funders, is the ideal process to use in SSEevaluation.


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4.8 International structuresof the SSE

International structures of the SSE have existed forover a century. The International CooperativeAssociation was founded in 1895. Over the years,several have become important institutions thatparticipate actively in social dialogue at a continentalor international level. They represent, through theiraffiliates, hundreds of millions of members. Thesestructures are generally based on common legalstatus.

Some international networks bring together SSEOsin the same sector. Other networks are made upprincipally of SSEOs but have a broader mission thatis related to their sector.

Over the past decade, new international networkshave emerged to give a voice to new forms and newactors in the SSE. These networks are generallymore informal in their structures and have access tofewer resources. They defend a broad and inclusivevision of the SSE by bringing together actors with awide range of practices. They strive for morevisibility for these new practices and build allianceswith social movements in support of the emergingSSE.

Several international bodies have begun work insupport of the SSE in response to a renewal ofinterest in its contribution to development. TheOrganisation for Economic Co-operation andDevelopment’s (OECD’s) Forum on SocialInnovation is actively involved in supporting OECDcountries interested in developing public policy insupport of the SSE. The ILO’s adoption of an actionplan for the SSE represents a major step forward inrecognizing its potential contribution to sustainabledevelopment. The United Nations DevelopmentProgramme’s (UNDP’s) training branch has alsobegun work on the theme of the social economy andlocal development.

The most important institutionalized networks are:

� The International Cooperative Alliance, founded in1895, promotes the cooperative identity andworks to create favourable conditions for

cooperative development. Its 223 members arenational and international cooperatives operatingin all sectors of activity. They are particularlyconcentrated in agriculture, insurance, banking,consumer affairs, housing, industry, fisheries,health and tourism. (www.ica.coop)

� The World Council of Credit Unions (WOCCU) isthe main structure for social economy institutionsoperating in micro-finance. It networks over54,000 savings and credit cooperatives with atotal membership of 186 million people in 97countries. It offers support to the sector,particularly in monitoring and evaluation.(www.woccu.org)

� The International Cooperative and Mutual

Insurance Federation (ICMIF) is the largestorganization representing cooperative andmutual insurance organizations in the world. Ithas 212 affiliates in 73 countries. (www.icmif.org)

� The Association Internationale de la Mutualité

(AIM), established in the 1950s, unites 40federations and associations of autonomousmutual benefit societies in health and socialprotection in 26 countries. The AIM affiliatesprovide coverage for more than 170 millionpeople across the world. (www.aim-mutual.org)

Some international networks are organized bysector of activity. Some examples include:

� The World Association of Community Radio

Broadcasters (AMARC) brings together a networkof more than 4,000 community radios,federations and community media stakeholdersin more than 115 countries through service tomembers, networking and projectimplementation. The main global impact ofAMARC since its creation in 1983 has been toaccompany and support the establishment of aworldwide community radio sector that hasdemocratized the media sector. (www.amarc.org)

� The International Association of Investors in the

Social Economy (INAISE) is a global network ofsocially and environmentally oriented financialinstitutions. Created in 1989, INAISE bringstogether social investors from European andnon-European countries to exchange experience,disseminate information and demonstrate thatinvestors can achieve positive social and


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environmental change. INAISE members,through their investment policy, foster andpromote the development of SSEOs.(www.inaise.org)

� The Financial Alliance for Sustainable Trade

(FAST) is a global, member-driven non-profitassociation that represents lenders andproducers dedicated to bringing sustainableproducts to market. FAST brings together thisdiverse group of stakeholders to work collectivelyto increase the number of producers organized incooperatives in developing nations who cansuccessfully access quality trade finance, tailoredto their needs, as they enter sustainable markets.(www.fastinternational.org)

� The International Center of Research and

Information on the Public, Social and Cooperative

Economy (CIRIEC) was founded in 1947 inSwitzerland. Its members are researchers andsocial economy actors who collaborate toproduce research, organize activities andproduce publications on the social and publiceconomy. (www.ciriec.ulg.ac.be)

� COPAC (Committee for the Promotion andAdvancement of Cooperatives is a committeecomprised of the cooperative movement,farmers’ organizations and the United Nationsand its agencies. Members include the Food andAgriculture Organization of the United Nations(FAO), the International Cooperative Alliance((ICA), the International Federation of AgriculturalProducers (IFAP), the ILO and the United Nations.Members work together to promote andcoordinate sustainable cooperative developmentby promoting and raising awareness oncooperatives. Technical cooperation, advocacy,policy dialogue and knowledge- andinformation-sharing are its main activities.(www.copacgva.org)

New global networks are being built to respond tothe needs and aspirations of the emerging SSE.These include the following examples:

� The overall mission of the Intercontinental

Network for the Promotion of the Social and

Solidarity Economy (RIPESS) is to build andpromote the SSE. Initiated as an informalnetwork in Peru in 1997, RIPESS incorporated in

preparation for the Dakar Meeting on theGlobalization of Solidarity in 2005, which broughttogether SSE actors from over 60 countries.RIPESS supports the creation of national andcontinental networks and works to build linksamong the many actors and partners of the SSE.It organizes intercontinental events every fiveyears. RIPESS is well-established in LatinAmerica and North America and has begun to bestructured in Africa, Asia and Europe.(www.ripess.org)

� From the initiative of five chief executive officersfrom large French social economy organizations,the Mont Blanc Meetings bring together leadersof the social economy from different countrieswith the aim of developing international projectsand helping to build a stronger social economy.The purpose of this new network, created in2003, is to answer the challenges of globalizationby demonstrating that it is possible to dobusiness differently and to promote an economythat respects humanity and the environment.International meetings are held every two yearson a topical subject, but the forum is also apermanent platform of actors and projects.(www.rencontres-montblanc.coop)

4.9 Key findings

� Because of shared values, SSEOs have a longhistory of creating networks, partnerships andmore formal federations. In return, thesestructures support their members in manydifferent ways.

� SSE actors choose the most appropriate formsand mandates for working together in a givenhistorical and geographical context, but it is clearthat emerging networks are more horizontal thaninstitutionalized federations, which havedeveloped vertical structures to take into accounttheir size, various mandates and organizationaltraditions.

� Diverse structures play a central role in gainingrecognition for the SSE through advocacy andpromotion of their members’ immediate orlong-term interests. In countries where there isformal recognition of the SSE (or of a componentof the SSE based on juridical status), these


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networks play a role in social dialogue. In certaincases, networks help to build bridges with socialmovements, including labour organizations.

� Over the past decade, the networks that practiceinclusiveness have been the most successful indeveloping new public policy and creatingdevelopment tools for the emerging SSE.Because they are better able to show the scopeand the depth of the SSE, networks that havebrought together a wide variety of SSEOs andother stakeholders have been able to initiatesocial dialogue with government and other socialpartners.

� Different national experiences show that theemergence of new networks is often the result ofa lack of flexibility by existing SSE structures totake into account new realities and newapproaches. Partnerships between theinstitutionalized SSE and the emerging SSE arestill the exception rather than the rule.

� Building from the bottom up is characteristic ofsuccessful networks and federations;successful networks are rooted in communitiesand territorial realities. The strongest networksare those that are based on local and regionalstructures. They benefit from the support of awide range of partners and their contributionto socio-economic development can be clearlydemonstrated in the field.

� The strength of networks is also related to theircapacity to respond to the priority needs oftheir members. Most networks begin asadvocacy groups, but rapidly create their ownservices and/or development tools to attaincommon objectives. These initiatives, in return,strengthen the networks and create a greatercapacity to act, as they become useful or evenindispensable for their members.

� Transparent, participatory governance is acharacteristic of dynamic networks, particularly inthe case of new networks. Member participationis the basis for the activities of emergingnetworks and continues to be essential forestablished networks to be able to identifypriorities and to satisfactorily carry out mandatesof representation and promotion.

� All networks play a role in reinforcing the SSEthrough peer learning or learning frominternational experience. Learning from otherSSE experiences – locally, regionally or nationally– has clearly been an enriching process for SSEactors across the globe.


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Case Study 4.1: Building a new national SSE network in Bolivia

Major actors

• SSEOs, community-based organizations, small producers, fair trade organizations, NGOs

The situation

In 2005, Bolivian SSE actors participated in the Intercontinental Meeting on the Globalization of Solidarity,organized by RIPESS in Dakar, Senegal and in regional SSE events in Cochabamba (2005) and Havana,Cuba (2007). Inspired by these learning experiences, the Red Nacional de Comercializacion Comunitaria(RENAC) initiated a process to create a national SSE network.

An important enabling factor for the creation of this network was the new Bolivian government’s concernfor economic democratization. Strengthened by this favourable context, the idea of creating a nationalstructure for the SSE and fair trade organizations in Bolivia emerged at a national meeting in 2007. In2008, the Bolivian Movement for the Solidarity Economy and Fair Trade (Movimiento de EconomiaSoliaria y comercio justo de Bolivia, or “MES y CJ”) was officially created.

What has been done

This multisectoral network connects 75 organizations and 5,000 community-based associations. Togetherthey represent over 80,000 small producers. Established organizations (e.g. the National Union for PopularArt, the Federation of Bolivian Coffee Growers and the National Council of Quinoa Producers) aremembers of the network. Its mission is to promote, develop and disseminate solidarity economy and fairtrade practices. It seeks to promote a national dialogue on policies for the SSE and fair trade. Its goal is tobecome a national and international reference for Bolivia. Solidarity, transparency and mutual respect arethe basic principles and values of this movement.

Despite its limited resources, the MES y CJ has carried out numerous initiatives. It has organized events topromote and raise awareness, produced communication tools and organized meetings to developcollaboration between government officials and members of the network. Inspired by the BrazilianNational Secretariat for the Solidarity Economy, the MES y CJ proposed the creation of a NationalDepartment for the Social Economy as part of the Ministry for Small and Micro Enterprises. A strategicplan was developed to clarify the main actions and priorities of the network.

The MES y CJ seeks to respond to the many difficulties small producers face in producing and sellingtheir products. Over 60 per cent of agricultural enterprises are so small that they are not officiallyregistered. They are therefore marginalized and ignored by public policy. The members of MES y CJidentified the SSE as an opportunity to win favourable public policy and to define a legal framework thatgives them access to fair trade markets.

The network has taken up the task of creating a common understanding of the challenges and a commonmessage among its members and of representing this perspective to government. Despite the fact that itsmembers must concentrate their energy on immediate issues of survival, the network has been successfulin developing training activities and opening up access to new markets.

In collaboration with partners (e.g. a Canadian NGO, the Centre for International Studies andCooperation,(CECI) and the Bolivian Ministry of Production and Micro-enterprise), training has beenorganized, including training of trainers whose role is to help member associations better understand thebasic concepts and principles of the SSE. An important goal of these initiatives is to reinforce internalcapacity for advocacy and political dialogue.


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Case Study 4.1 (contd.): Building a new national SSE network in Bolivia

The creation of a national network also has allowed Bolivian SSE actors to participate in regional SSEinitiatives in Latin America. It has reinforced the capacity to dialogue with government and otherstakeholders. Its members have taken up new initiatives, including the creation of a common commercialbrand for exporting its product – Sariwisa, which means in the indigeneous Aymara language “Our road,where we come from, who we are and where we are going”. This commercial brand has been tested withsuccess in Canadian markets for products made from llamas and alpacas.

What can be learned

The building of a national network in Bolivia is a vibrant illustration of how collaboration among SSEOscan reinforce their collective capacity to contribute to fighting poverty and improving people’slivelihoods. The new network faces important challenges to strengthen the SSE in Bolivia. However, theBolivian experience illustrates that it is possible to structure a significant network in a relatively shortperiod of time when there is a favourable context. The election of a national government supportive ofthe SSE was a major factor in accelerating the network’s development. The contact with other nationalnetworks in the region was another supporting factor.

Email address: [email protected]

Shaw Trust is one of the largest third sector providers of employment services for disabled people in the UK providingemployment and training opportunities.

ILO

/C

rozet

M.


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Case Study 4.2: Strengthening community forestry in Nepal

Major actors

• Community-based forestry user groups

The situation

Community forestry is a widespread practice in Nepal. It has succeeded because of provisions for theinclusion of, participation within and devolution through community-based user groups. The social andphysical capital generated by the synergy of action, defence of rights and collective resources has beeninstrumental in creating the constituency for a national voice for the SSE in the forestry sector.

Non-timber forest products (NTFPs), especially medicinal plants, constitute a range of forest-basedresources with the potential of enhancing the livelihoods of rural people. Many areas of Nepal, inparticular the high mountains and middle hill region, are endowed with valuable NTFPs. Some NTFPs arecommercially profitable, with an established collector-trader-producer marketing and commodity chain.However, the potential returns from most NTFPs are unrealized, because of the lack of value-addedtechnology or capital, excessive taxes or royalties and unfair terms of trade for local collectors. Thisundermines local incentives to protect and sustainably harvest NTFP resources.

What has been done

The seeds for forming a national federation were planted in study tours and networking and trainingevents. In 1991, a few community forestry user groups in Dhankuta District in eastern Nepal organized anevent for all user groups in their district. This idea was later replicated in other districts and eventuallyintegrated into district-level networking workshops for Direct Forest Offices’ preparation of annual workplans. The first national seminar was held in 1993. The growing number of district-level networkingworkshops helped build momentum for the creation of the national network in 1995.

The Federation of Community Forest Users of Nepal (FECOFUN) is a national federation of forest userswhich advocates for community forestry user group rights locally, nationally and regionally. FECOFUN’smembership stands at about 5 million people. This comprises rural based farmers – men, women, old andyoung – from almost all of Nepal’s 75 districts. Since its establishment in 1995, FECOFUN has beeninstrumental in representing concerns of community forestry user groups in deliberations about policyformulation and forest futures. It works to improve livelihoods through the creation of new communityand cooperative enterprises. FECOFUN is an autonomous, non-partisan, socially inclusive, non-profitorganization. It is Nepal’s largest civil society organization.

FECOFUN’s mission is an ambitious one. It seeks to promote and protect the rights of community forestusers through capacity strengthening, economic empowerment, sustainable resource management,technical support, advocacy and lobbying, policy development and national and international networking.It upholds the values of inclusive democracy, gender balance and social justice.

FECOFUN is particularly concerned about the role of women in community forestry and disadvantagedgroups, whose potential has not been realized in Nepal. Patriarchal traditions, caste hierarchy,discriminatory laws, social exclusion of ethnic groups and poverty combine to limit voices and choices.User groups consist of mutually-recognized collectors of forest products, but not all forest users are equalin terms of their access to private resources or degree of dependence on the community forest. Given thetraditional divisions, hierarchies and other forms of exclusion prevalent in Nepalese society, FECOFUNbelieves that it is essential that different kinds of users – especially women, the very poor, the landless,members of low castes and ethnic groups – are empowered to participate in deliberations and establishprocedures for equitable access and distribution of forest resources.


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Case Study 4.2 (contd.): Strengthening community forestry in Nepal

In its strategic action plan for 2010, FECOFUN identified a series of actions to become institutionallycapable, efficient and economically sustainable to ensure users rights and to support them to fulfil theirbasic forest needs. Among the key strategic goals are the creation of a database, the strengthening ofmanagerial capacity among forest user groups and the creation or consolidation of communitycooperatives and community enterprises based on forest products.

What can be learned

The formation of FECOFUN as a forest user advocacy organization has shown how networks are essentialtools for representing local people’s rights in national debates about strategic issues such as resourcemanagement. As a representative organization, FECOFUN’s emphasis on being inclusive, institutionallyeffective, self-reliant and democratic has been a major factor in its success. It has been recognized bystakeholders as an innovative and strong civil society organization in national resource management,social campaigns and proactive policy development and practice.

www.fecofun.org


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Case Study 4.3: From local networking to international solidarity:

the case of CGM, a consortium of Italian social cooperatives

Major actors

• Social cooperatives, the Italian cooperative movement

The situation

In 1991, a new Italian law on social cooperatives was passed and led to the rapid development of thisinnovative form of cooperatives. An Italian social cooperative is a particularly successful form ofmulti-stakeholder cooperative. A “type A” social cooperative brings together providers and beneficiariesof a social service as members. A “type B” social cooperative brings together permanent workers andpreviously unemployed people who wish to integrate into the labour market. Today there areapproximately 9,000 social cooperatives with more than 300,000 members, 30,000 volunteers and 25,000disadvantaged people undergoing integration.

Social cooperatives are restricted to providing service or employment in only one locality. They aretherefore fairly small; studies show a typical workforce of 33 employees per cooperative. This createdcertain obstacles to scaling up and obtaining access to business services and support. The solution to thisproblem has been the creation of geographic consortia which link all the social cooperatives of a localityor region. These social cooperatives are most often members of one of the four different Italiancooperative federations. The consortia differ from other networks in that they are based on a jointagreement among members with firm commitments to cooperate.

What has been done

The national consortium CGM (Consorzio Gino Mattarelli) was created in 1987 and is today the largestItalian consortium of social cooperatives. CGM is active in promoting and supporting the development ofsocial cooperatives. It offers support for skills development through the transfer of best practices andinformation sharing. It carries out research to study and improve the operations and development ofsocial cooperatives. CGM and its regional members are particularly active in opening up new marketsthrough negotiations with public authorities and private enterprises interested in purchasing goods andservices from social cooperatives.

Over the years, CGM has brought together 75 territorial consortia and created six specialized subsidiaries.In 1998, CGM created the CGM Finance Consortium. Its activities include direct funding to membersthrough partnerships with members, financial institutions and non-profit lenders. CGM Finance, as anational organization, is able to support members in regions where interest rates remain very high andaccess to credit is more difficult.

The CGM community solidarity consortium brings together members involved in services for the elderly,the disabled and those suffering from problems of mental health. Other sub-networks are organizedaround environmental initiatives and crafts.

CGM partnered with the Consortium CTM Altromercato for Fair Trade and the Federation of ChristianOrganizations for International Voluntary Services (FOCSIV) to create SolidaRete, a foundation forinternational solidarity. Based on its belief in the need to create a worldwide movement for the SSE, thisfoundation is active in supporting the development of social enterprise outside Europe.


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Case Study 4.3 (contd.): From local networking to international

solidarity: the case of CGM, a consortium

of Italian social cooperatives

What can be learned

CGM is an interesting example of how a network can support its members by opening up access tomarkets and by creating strategic instruments for development despite the fact that its members are smallenterprises. It also shows how a network can practice solidarity by intervening, in a national context, incertain regions where the development context is less favourable and through international solidarityactions.

www.consorziocgm.org

Chapter 5: Contributions of the SSEto the ILO Decent Work Agenda

5.1 Introduction

Through its combined social and economicobjectives and its functioning principles, the SSE iswell-placed to contribute to development policiesand challenges (e.g. poverty reduction strategiesand millennium development goals) by fulfillingdifferent essential functions, including reaching outto vulnerable populations, delivering services,representing various groups and lobbying.

In this chapter, we will focus on how SSEOs arecontributing or could further contribute toimplementing a specific international framework, i.e.the ILO Decent Work Agenda. According to the ILO,the Decent Work Agenda offers a basis for a morejust and stable framework for global development.Through a systematic review of the four pillars of theDecent Work Agenda, we will try to demonstratethat there is indeed a clear congruence between theobjectives pursued by SSEOs and the aims of theDecent Work Agenda.

Box 5.1: What is decent work?

Decent work sums up “the aspirations of peoplein their working lives – their aspirations foropportunity and income; rights, voice andrecognition; family stability and personaldevelopment; and fairness and gender equality.Ultimately these various dimensions of decentwork underpin peace in communities andsociety. Decent work reflects the concerns ofgovernments, workers and employers, whotogether provide the ILO with its uniquetripartite identity.

Decent work is captured in four inseparable,interrelated and mutually supportive strategicobjectives: fundamental principles and rights atwork and international labour standards;employment and income opportunities; socialprotection and social security; and socialdialogue and tripartism. These objectives holdfor all workers, women and men, in both formaland informal economies; in wage employmentor working on their own account; in the fields,factories and offices; in their home or in thecommunity. The ILO considers decent work ascentral to efforts to reduce poverty, and ameans for achieving equitable, inclusive andsustainable development. (…) The ILO isdeveloping an agenda for the community ofwork, represented by its tripartite constituents,to mobilize their considerable resources tocreate those opportunities and to help reduceand eradicate poverty.”

www.ilo.org/global/About_the_ILO/Mainpillars/WhatisDecentWork/lang—en/index.htm


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5.2 Promoting and realizinglabour standards and rightsat work

Defining, promoting and guaranteeing labourstandards and rights at work is one of the four pillarsof the Decent Work Agenda. The ILO has adoptedmore than 180 ILO conventions and 200recommendations covering all aspects of the worldof work. In 1998, the International LabourConference (ILC) adopted a Declaration onFundamental Principles and Rights at Work defininga set of core labour standards (i.e. freedom ofassociation and freedom from forced labour,discrimination and child labour) to be considered asbasic human rights and a central plank of decentwork. More globally, the ILO 2008 Declaration onSocial Justice for a Fair Globalization states thatILO’s commitment to the advancement of the SSE isgrounded in the conviction that in a globalized world“productive, profitable and sustainable enterprises,together with a strong social economy and a viablepublic sector, are critical to sustainable economicdevelopment and employment opportunities”.

SSEOs, through their social values and participatoryoperations, can indeed play a role in promotinglabour standards and realizing labour rights. In theSouthern countries, this is particularly true for theinformal workers, who constitute the major part ofthe labour market. By organizing and providingservices to informal economy workers, SSEOs, oftenin collaboration with employers’ and workers’organizations, tackle the lack of respect for informalworkers’ labour rights and inappropriate measuresand address some of the workers’ day-to-dayindividual and collective problems. In addition, theILO’s promotion of SSEOs offers the opportunity tofurther extend and strengthen labour standardswithin the informal economy.

5.2.1 The role of cooperatives

Cooperatives offer a variety of advantages forcounteracting the difficult challenges in the informalsector, which include tremendous competitionamong workers, poor working conditions, poor pay

and insufficient time for getting involved in collectiveorganizations. Cooperative structures can unite theeconomic and commercial concerns of workers inthe informal sector and can also strengthen workers’actions and support their common demands toother economic actors and public authorities.

In 2010, a general survey of ILO member-states’contributions reaffirmed that the promotion ofcooperatives within the ILO is in-line with the 1998Declaration on Fundamental Principles and Rights atWork and other Conventions. In particular, thesurvey clearly established that promoting the role ofcooperatives to achieve the social inclusion of all ofits members, including those who aredisadvantaged, contributes to the objectives of theILO Employment Policy Convention 122. 1

Migrant workers are a particularly vulnerable groupsince they are often obliged to accept jobs in verybad working conditions and/or in the informaleconomy, especially in times of crisis wheneconomic systems are disrupted. Coordination


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Box 5.2: The National Union of

Taxi-Moto Drivers in Benin

Created in 1995 in Benin, the National Union ofTaxi-Moto Drivers (Union Nationale desConducteurs de Taxi-Moto or UNACOTAMO) isan independent organization affiliated with theBeninese Trade Union Confederation (CGTB),which also helped to start this torganisation.UNACOTAMO aims to address the fundamentallabour-related problems faced by its drivermembers, including bad working conditions(professional diseases), lack of training andlabour relations between the drivers and theirso-called “employers” (i.e. owners of themotorbikes). UNACOTAMO tackles theseproblems through social and solidarity initiatives(e.g. mutual health organizations) and throughlobbying public authorities and “employers” inorder to improve the labour rights of the drivers.

Source: Social Alert, 2005

1 General survey concerning employment instruments in light of the 2008 Declaration on Social Justice for a Fair Globalization, ILC (2010).

between the ILO’s constituents and migrants’organizations could be stepped up to ensurecompliance with Conventions Nos. 111(Discrimination – Employment and Occupation) and97 (Migration for Employment).

Box 5.3: A migrant workers’

cooperative in Indonesia

In Malang City, Indonesia, (one of the mainareas for migrant workers in the country), agroup of returned migrant workers decided in2005 to establish a cooperative called Koperasi

TKI Purna Citra Bumi Mandiri. This cooperativeoffers financial products and services tailored tothe needs of people who cannot have access tothe banking institutions. In 2009, thiscooperative provided a wide range of productsfrom food and agricultural goods to fertilizersand microcredit. With a total of 29 memberscovering 100 migrant families, the cooperativenow holds total assets of US$13,000. Itsmembership continues to grow as they benefitfrom the productive use of remittances, creditfor health and education and income-generatingactivities. Since last year, the cooperative hasbeen formally registered at the Malang DistrictCooperative Office.

http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Feature_stories/lang—en/WCMS_110094/index.htm

5.2.2 Eliminating child labour

The elimination of child labour is another area inwhich SSEOs can add value. The ILO InternationalProgramme on the Elimination of Child Labour hasbeen working for years in cooperation with SSEOswhose activities are in line with the multidimensionalapproach that is necessary to eliminate child labour.

Box 5.4: Cooperatives’ role in

the effective abolition of child

labour

Cooperatives have an important role to play inthe elimination of child labour, and theircapacity should be strengthened to ensure thatthey can support their members andcommunities in adopting child-labour freeproduction processes.

In particular, cooperatives can help theirmembers eliminate child labour by raisingawareness and providing information andtechnical and financial services. Cooperatives,through democratic participation of theirmembers, can strengthen social dialogueprocesses by enabling the voices of smallfarmers to be heard in decisions affecting thegovernance of supply chains and broaderpolicy. Through support of cooperatives, supplychains can adopt voluntary standards andensure that production processes are free ofchild labour.

Beyond influencing and supporting theirmembers, the cooperative movement canadvocate for the elimination of child labour atnational, regional, and international levels,including by lobbying for the ratification andapplication of relevant ILO Conventions (e.g.Convention No. 138 on Minimum Age andConvention No. 182 on Worst Forms of ChildLabour). The ILO has produced trainingmaterials to build the capacity of cooperativesto eliminate child labour (e.g. the “Trainingresource pack for agricultural cooperatives onthe elimination of hazardous child labour”(2009)).


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Box 5.4 (contd.): Cooperatives’

role in the effective abolition of

child labour

Cooperatives across the world havedistinguished themselves through a range ofinitiatives aimed at eliminating child labour.Some examples of these initiatives include:

• improving livelihoods of their members andpeople in the communities they serve toprevent the use of child labour (e.g. coffeemarketing cooperatives in Costa Rica andNicaragua, a cocoa marketing cooperative inBelize);

• helping the communities in which they arelocated to root out all forms of child labour incollaboration with the private sector andthrough supply chains (e.g. fair trade cocoa inBolivia, Farmapine Ghana Limited in Ghana,MIGROS Switzerland and school projects inIndia, a handicraft cooperative in Kenya, acarpet weaving cooperative in Pakistan,sewing cooperatives in India);

• ensuring that their product supply chains arefree of child labour (e.g. the MountainEquipment Cooperative in Canada,Cooperative Group in UK, Coop Italia in Italy,Coop Norden in Denmark, Toys MadeWithout Child Labour in Sri Lanka).

Extracted from the report “Cooperating Out of

Child Labour: Harnessing the untapped

potential of cooperatives and the cooperative

movement to eliminate child labour”(ILO,2009), developed by the ILO CooperativeProgramme in collaboration with the ILO’sInternational Programme on the Elimination ofChild Labour (IPEC) and the InternationalCooperative Alliance (ICA).

5.3 Securing decentemployment and income

The second pillar of the Decent Work Agenda relieson creating greater opportunities for women andmen to secure decent employment and income.

According to the ILO, “there has never been agreater need to put employment at the centre ofeconomic and social policies”. With regard toemployment, the 2009 report of the ILODirector-General points out that “developingcountries have been particularly hit by job losses informal, mostly export-oriented, industries. These joblosses will tend to further inflate the ranks ofinformal workers, including in agriculture, therebyraising competition among low-incomeoccupations” (ILO, 2009, p.8).

The ILO estimates that approximately 73 per cent ofworkers in sub-Saharan Africa are in vulnerable jobs.The economic and financial crisis represents aserious threat to investment in infrastructure andproducer goods, which is vital if the region is tocontinue to develop. Furthermore, the harm that


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Box 5.5: A new economic

model in Lima, Peru

In the Programme to Eliminate Child Labour inthe Brick Sector in Huachipa, near Lima (Peru),the ILO’s International Programme on theElimination of Child Labour (IPEC) is workingwith an NGO called AIDECA, which hasexperience in the field of development, focusingon social and technological issues and forgingstrong public-private alliances, to provide a neweconomic model for families making bricks.AIDECA has developed a plan for a new kind ofkiln and production system that combinesefficiency with ease of operation, lowmaintenance costs and low energyconsumption. A new community NGO has beenestablished, managed by the beneficiaries, forcommunity governance and management of a“social development brick factory” for familieswhose children are not allowed to work. Fiftyper cent of profits are reinvested and the otherhalf goes to social and educational projects.AIDECA has established programmes ingovernance and decision-making to raisebeneficiaries' capacity to run the brickworks.

http://www.ilo.org/ipec/Partners/NGOs/lang—en/index.htm

could be caused by global protectionism and adecrease in foreign direct investment as a result ofthe crisis must not be underestimated (ILO, 2009b). InGhana, for instance, the number of jobs generated byforeign investment decreased by 126 per centbetween 2007 and 2008 (Willem te Velde, 2009). Inrural areas, there is a serious shortage of decent work(ILO, 2008), a malfunctioning rural labour market, alow level of rural worker organization/representation,underemployment and low incomes. Thefeminization of agricultural activities, which hasresulted from the migration of men in search ofactivities generating better incomes, is increasing.The ILO 2010 Global Employment Trends reportconfirms that despite some signs of recovery, highunemployment levels will continue in 2010 in everypart of the world, reflecting continued uncertainty inthe labour market, deteriorating working conditionsand quality of employment, increasing part-time workand discouraging labour markets leading to reducedparticipation (ILO, 2010, p. 42).

As SSEOs pursue both economic and socialobjectives, they play a major role in creating andsecuring decent employment and income. Withinthe SSE, cooperatives have been major employersfor years in several Northern and Southerncountries. According to the InternationalCooperative Alliance (Chavez, 2008):

“Cooperatives are the largest privateemployer in Switzerland, the second largestemployer in Colombia; in India the dairycooperatives alone generate nearly 13 millionjobs for farm families, while in France and Italythey provide for over a million jobs to cite afew salient facts. At the state, provincial andlocal levels, they are also significant as forexample in Quebec (Canada) where a financialcooperative, The Desjardins Group, is theleading employer or in the United States’State of Wisconsin, where 71 per cent of alljobs are attributed to the cooperative sector.”

Opportunities to create jobs and generate incomeare very dependent on having access to needed

resources. The social microfinance services offeredby many SSEOs (e.g. self-help groups, credit unions,financial service associations, savings and creditcooperatives and rotating savings and creditassociations) allow people with limited access toclassical financial services to save, secure andborrow money at affordable conditions frominstitutions that they control or partially control. Thismechanism was recognized in the 2002 ILCresolution on the informal sector that presentsmicrofinance as a bridge to help informal operatorsfind their way into the mainstream economy. Socialand solidarity microfinance institutions contribute todecent work by creating conditions for wage andself-employment, reducing vulnerability (e.g. withreducing irreversible coping strategies) andempowering vulnerable people throughparticipatory decision-making processes.

Decent jobs also depend on existing and potentialmarkets. This is another area in which the SSE canplay a major role. The fair trade sector, in particular,has provided a means of creating not only newdomestic markets but also foreign markets, and ofcreating jobs that fulfil the conditions of decent work.There are numerous areas in which the SSE can createnew markets. SSEOs create a large number of “greenjobs”, i.e. jobs which aim to attenuate and prevent thecountless environmental threats that are hanging overthe planet. They should be supported in this


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A retail worker who has benefited from Shaw Trust'sservices. Shaw Trust is the UK's largest third sectorprovider of employment services for disabled anddisadvantaged people, London, UK.

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endeavour not only because they provide a means ofoffsetting job losses, but also because of the addedvalue created by such activities in the long term.

Box 5.6: Local organizations

creating jobs in Ghana and Nepal

Kuapa Kokoo in Ghana is a symbol of successand hope. This collective enterprise, which wasset up in 1993, now has almost 40,000members in 1,650 village societies and employsover 250 people. It is a producers’ cooperative,a cocoa marketing company (the cocoa isproduced by the members of the cooperative)and a trust company which manages thesurpluses from sales to free trade marketingchannels. A very special feature of thiscollective enterprise is that it was launchedduring the liberalization of the cocoa markets inGhana, a process which the founders identifiedas an opportunity for creating a profitableenterprise (Wanyama, 2008).

In another part of the world – Nepal –Mahaguthi (Craft with a Conscience) is a fairtrade organization which produces, markets andexports Nepalese crafts. Mahaguthi serves boththe domestic and international markets and hasthree shops based in the Kathmandu Valley.This organization gathers more than 1,000individual producers, 50 per cent of whom arefrom remote and mountainous areas. Many ofthese producers are women who are given thechance to employ traditional skills in their ownhomes, thus enabling them to generate extraincome.

www.mahaguthi.org

The informal sector remains a big challenge for theDecent Work Agenda. As the ILC 2002 (ILO, 2002,p.4) report states, “the most meaningful way oflooking at the situation of those in the informaleconomy is in terms of decent work deficits;poor-quality, unproductive and unremunerative jobsthat are not recognized or protected by law, theabsence of rights at work, inadequate socialprotection, and the lack of representation and voiceare most pronounced in the informal economy,

especially at the bottom end among women andyoung workers”. Considering the particularorganizational principles of some informal economyunits – see chapter 1 – there are opportunities tohelp the formalization of some units under socialand solidarity organizational forms.

Box 5.7: The Self-employed

Women Association in India

In India, the Self-employed Women Association(SEWA) is a trade union which was registered in1972. It is an organization of poor, self-employedwomen workers who earn a living through theirown labour or small businesses. Among manyother services, SEWA organized 84 cooperatives(e.g. dairy cooperatives, artisan cooperatives,service and labour cooperatives, land-basedcooperatives, trading and vending cooperatives),gathering 11,610 members. Women provide theshare capital for the cooperatives and obtainemployment from them. One woman may be amember of one or more cooperative. Eachcooperative is run by a democratically electedexecutive committee of workers. The largestcooperative is SEWA Bank with 125,000members.

www.sewa.org

Education and training are key factors to goals of theDecent Work Agenda. SSEOs, such as cooperatives,can play a specific role – not only in implementingthe cooperative principle of education/training andinformation, but also in developing innovativeapproaches in the field. The development of the SSEcan be promoted among future leaders andentrepreneurs. The cooperative colleges in theUnited Kingdom and in several AfricanEnglish-speaking countries (e.g. Ethiopia, Kenya andTanzania) and structures such as the AfricanUniversity for Cooperative Development (AUCD)(formerly the Institut Supérieur Panafricain

d’Economie Coopérative (ISPEC) in Cotonou) runtraining courses connected with cooperatives andan increasing number of more general courses thatare geared to the social economy as a whole. Froma broader perspective, various SSEOs offer


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professional training activities to enrich theopportunities for workers to find jobs.

SSEOs pay particular attention to vulnerable groups(e.g. women, people living with AIDS, migrant workers,people with disabilities) who face barriers in accessingthe labour market. For example, social enterprises maydevelop services to address the needs of vulnerablegroups, but they may also hire people – on a temporaryor permanent basis – who have greater difficultyaccessing the labour market. By doing so, socialenterprises play a major role in labour integration.

Local development and the SSE are seen ascomplementary tools that both strive for democracy,partnership and empowerment (Schwettman, 2006).Like the SSE, local economic development providesopportunities for innovative approaches inaddressing the employment crisis. Local economicdevelopment focuses on local competitiveadvantages. It provides means of identifying newopportunities for creating jobs and generatingincomes and helps to improve job quality in generalthrough the participation of local stakeholders, and

by basing an economic activity in a given location.The distinctive feature of local economicdevelopment is that participatory processes areinvolved, in which both public and private actors areinvited to take part. The effects of this socialdialogue are measured not only in terms of neweconomic partnerships but also in terms of socialcohesion and institutional transparency.

Box 5.8: The Jupiter Foundation

creates jobs in Finland

In Finland, the Jupiter Foundation (a workorientation centre) was founded in 2001 by socialeconomy enterprises, non-profit organizations,public authorities, the regional waste managementcompany and a parish with the aim to bringtogether different experiences, knowledge, skillsand other resources in order to develop the bestpossible employment and inclusion services fordisadvantaged parts of the population. Theobjective of “inclusion into society and into thelabour market” was combined with principles ofenvironmentally sustainable development.Recycling became the main business of thefoundation.

Jupiter’s mission is to support youngsters,long-term unemployed, immigrants, people inneed of mental or physical rehabilitation prior toentering the labour market and others who needhelp in finding a job, training or rehabilitation. Workdepartments include: the EKOCENTER(dismantling and repairing electronic householdand office machines, recycling constructionmaterials, managing the city reception point forproblematic waste and washing trucks and othervehicles); handicrafts (e.g. upholstering furniture,recycling clothes, fabricating Jupiter-brand textileproducts and printing cloth); carpentry andconstruction (renovating wooden furniture,fabricating new wooden products, small-scaleconstruction and house restoration); managementof the Jupiter Recycling Boutique and Café Jupiter(140 lunches and café products for Jupiter staff andfor clients outside); and cleaning services.

http://www.revesnetwork.eu/public/Local_Partnership_and_Recycling.pdf


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Building repairs at one of the central streets in Moscow(without proper security measures).

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5.4 Enhancing andbroadening social protection

The 1997 financial crisis highlighted the importanceof social protection in several Asian countrieswhere social protection mechanisms had beenseriously neglected. It was recognized that if suchmechanisms had existed before that crisis, theeconomic recession would not have hit theirpopulations quite as hard (Norton et al., 2001). As aresult, in recent years, there has been increasingattention to social protection. What would happento about 80 per cent of the world's population whodo not have access to adequate social securitybenefits? And what would happen to the peoplewho have only minimum social coverage andbenefits which are limited solely to occupationalrisks, maternity and pension?

The ILO points out that the austerity that has beenimposed in many countries may affect the qualityand availability of public services and that womenand girls, in particular, are liable to suffer theconsequences in terms of social benefits. Incomeslost by women will have more negative effects in thelong term than income losses suffered by men. Also,

measures to combat the HIV/AIDS pandemic couldsuffer because of waning efforts by the internationalcommunity (particularly regarding funding for AIDStreatment) and, as a result, the disease is liable toprogress where it has receded in the last few years(World Bank, 2009).

The SSE’s involvement in social protection is easy tounderstand since SSEOs are often member-basedand their activities often focus on people who do nothave access to the goods and services produced bythe orthodox economy. As member-basedorganizations, they are often well-placed to detectemerging economic and social problems, emergingrisk groups and new needs. Most SSEOs involved insocial protection schemes:

� manage insurance mechanisms, such as microhealth insurance schemes;

� facilitate their members’ access to insurancemechanisms, such as cooperatives (e.g. healthcooperatives), mutual benefit societies (e.g.mutual health insurance), associations (e.g. tradeunions) and microfinance institutions.


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Child fruit seller in the streets of Addis Ababa, Ethiopia.

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In many Northern countries, SSEOs are majorplayers in providing health insurance schemes.Mutual benefit societies provide competitiveinsurance schemes (in comparison with the privatesector) and other additional services, such as patientrepresentation and prevention services, healtheducation, information and advice to members(AIM, 2008). These additional services not onlyempower the patients by allowing them to makebetter decisions, but also reduce individual andpooled health-related costs.

In developing countries, finding ways of providingrelevant and effective coverage to informal workersand their families is a priority.2 The ILO considersthat a strategy to extend social security coverageshould be based on two different types of individualrights: i) a right that devolves from the payment ofcontributions or taxes; and ii) rights comprising a“threshold”, or basic social security, for all. Such athreshold gradually can be consolidated aseconomic development progresses and/or whennew needs arise. In collaboration with the WorldHealth Organization and other UN organizations, theILO is leading the development of the concept of asocial protection floor that should be developed toprotect people during and after a crisis. A socialprotection floor could consist of two main elementsto help realize human rights:

� Essential services: ensuring the availability andcontinuity of and access to public services (e.g.water and sanitation, health, education andfamily-focused social work support);

� Social transfers: a basic set of essential socialtransfers, in cash and in kind, paid to aid the poorand vulnerable; these would enhance foodsecurity and nutrition and provide minimumincome security and access to essential services,including education and health care.

For more than 20 years, SSEOs in developingcountries have provided, for example,community-based health insurance schemes,

especially to rural and informal workers not coveredby national social security systems. In somecountries, these health insurance initiatives havebeen integrated into national health insuranceschemes. Other socio-economic groups (e.g.teachers) also have created mutual healthorganizations to benefit from complementary healthinsurance schemes. These kinds of organizationsare found especially in Central and West Africa. Anincreasing number of these initiatives are organizedin networks and federations in order to betterrepresent their movement and to offer supportingadministrative and financial services.

Box 5.9: Drafting legislation on

mutual social organizations

The West African Economic and MoneratyUnion (WAEMU) member countries have seizedthe opportunity that the SSE presents for thefuture. In 2004, WAEMU launched a large-scaleproject, together with the ILO and the FrenchInternational Cooperation Agency, to draftlegislation on “mutual social organizations”(covering health risks and not excludingextension to other social risks such as lifeinsurance and retirement insurance) for theentire WAEMU area.

The ILO conducted the preparatory work on thisdraft legislation, adopting a participatoryapproach (including health authorities, mutualhealth societies and their support structures aswell as national public authorities) with a viewto identifying needs in the sector anddetermining what the various actors expectedof the legislation. Once the project had beencompleted, the WAEMU Council of Ministersadopted draft regulations for mutual socialorganizations within the WAEMU in June 2009.


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2 A fair globalization – The role of the ILO, Report of the Director-General on the World Commission on the Social Dimension ofGlobalization (92nd Session, 2004).

The HIV/AIDS pandemic is a major concern in thesocial protection field, and in the context of theDecent Work Agenda. It is well-known that civilsociety organizations have made major efforts inresponse to the pandemic. In particular, associationsand other community-based organizations have setup general (psychosocial and medical) care facilitiesfor people infected with the virus and living withHIV/AIDS. In many countries, the public sector hasclearly drawn inspiration from these innovativepractices when designing national policies. The linksbetween these public and private actors should bestrengthened in efforts to provide care for HIVpatients and to combat the disease.


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Box 5.10: Health insurance schemes in Ghana

Formal health insurance is relatively new in Ghana, even though support in times of need (e.g. for healthcare and bereavement) has been provided for many decades through traditional informal networks basedon social capital and solidarity. While health care has been available, largely on a cash-for-service deliverybasis, the growing inequalities inherent in the system have long been troubling, and have led mostrecently to the implementation of the National Health Insurance Scheme (NHIS).

Three major types of health insurance exist in the country: (1) district mutual (or community-based) healthinsurance schemes (operating across a district with membership open to all residents of the district); (2)private commercial health insurance schemes (private for-profit schemes that are not restricted to aparticular region or district, but whose membership is open to all Ghanaian residents); and (3) privatemutual (community-based) health insurance schemes (serving specific groups of people – for example,members of a club, a church or any other organization).

Data from the Ghana NHIS headquarters in Accra indicate that in 2008 some 12.5 million Ghanaians, or 61per cent of the total national population of 20.4 million, had registered with the NHIS (NHIS, 2009). Thelargest numbers of members, in absolute terms, are from the Ashanti region (2.8 million), the Brong Ahaforegion (1.5 million), the Greater Accra region (1.4 million) and the Eastern region (1.4 million). Of the totalenrolled, some 6.3 million (or slightly more than 50 per cent) are children under 18 years of age; 867,000(or 6.9 per cent) are over 70 years of age and 303,000 (or 2.4 per cent) are classified as “indigent”, all ofwhom are, in principle, exempted from contribution payments.

The Ghanaian experience shows that it is possible for a country – whose workforce in the informaleconomy is 90 per cent of the total workforce – to successfully address challenges such as insufficientfunding, low service quality and exclusion, by introducing multiple social health protection schemesranging from community-based schemes to a national health insurance scheme for different groups of thepopulation and bringing them progressively into alignment. The experience here indicates that animportant key to success lies in ensuring access to all citizens while simultaneously targeting the poor.

ILO, 2010, p.97

Box 5.11: Helping those with

HIV/AIDS in Uganda

The AIDS Support Organisation(TASO) thefamous Ugandan organization which was set upin 1987, has enabled over 20,000 people livingwith HIV to receive anti-retroviral therapy; thishas been achieved mainly through the efforts ofsome 1,500 AIDS community workers livingwith HIV/AIDS, who have been trained toprovide counselling and to promote awarenessamong their peers of the importance ofpersevering with their treatment. In view of thesuccess of its action, TASO has become a keypartner in national policies to combat HIV/AIDSin Uganda and has no doubt helped to reducethe seroprevalence rate (which is still estimatedat 6.7 per cent in adults in the 15–49 age group).

UNAIDS, 2008; www.tasouganda.org andSidaction/UNAIDS/WHO, 2005

5.5 Strengthening andextending social dialogue

ILO defines social dialogue as all types ofnegotiation, consultation or exchange of informationbetween or among representatives of governments,employers and workers, on issues of commoninterest relating to economic and social policy. Themain goal of social dialogue is to promoteconsensus building and democratic involvementamong the main stakeholders in the world of work.Successful social dialogue structures and processeshave the potential to resolve important economicand social issues, encourage good governance,advance social and industrial peace and stability andboost economic progress. Social dialogue is acrucial factor of social cohesion among actors in asociety. Especially in difficult economic times, socialcohesion may deteriorate as the result of strongercompetition among workers.

Since SSEOs are often community-based and thusclose to the concerns of people and communities,they are often well-placed to detect emergingeconomic and social issues, emerging risk groupsand new needs. SSEO practices, which are inclusiveand encourage transparent decision-making andoperating methods, develop a culture of dialoguethat could cast new light on governance issues. Itcould be in the interests of the classical tripartitesocial dialogue structures to involve or consultSSEOs, as well as other civil society actorsrepresenting vulnerable populations in the world ofwork (e.g. women, migrant workers, groups with nosocial protection, people who do not have decentjobs). Better cooperation between SSEOs (e.g.cooperatives) and other membership-basedorganizations (e.g. trade unions or employers’organizations) can foster mutual advantages. Forinstance, Palestinian trade unions are establishing aninterface with cooperatives because they areinterested in unionizing the members ofcooperatives. Meanwhile, cooperatives can tacklethe problems of informality, still an unfamiliarterritory for many trade unions, as they cancontribute to achieving some semblance of jobprotection and social security, especially in ruralareas (ILO, Regional Office for Arab States).

As for the ILO, the International Cooperative Alliance(ICA) signed a Memorandum of Understanding(2003), and it benefits from a consultative status atILO organs (Governing Body and InternationalLabour Conference, as stated in the ILO Constitution(Article 12, §3). At the European level, CooperativeEurope (European Region of the ILC) is leadingvarious actions to improve the participation ofcooperatives in the European social dialogue and togain recognition as a European cross-sector socialpartner by the European Commission (CooperativeEurope, 2007).

Periods of crisis are accompanied by recovery plansand plans for reforming systems that contributed tothe crisis. To ensure that these reforms are relevant,these plans should be elaborated with social partners,as well as in consultation with other economic actors,including SSE actors. When reforms are designed inthis manner, there is greater adherence on the part ofthe various stakeholders, which in turn will facilitateimplementation. Associating social partners andSSEOs in the measures to monitor and evaluatethese public policies and other negotiations at theinter-sectoral, sectoral or company level can onlyenhance the appraisal of the results and theadjustments to be made. Processes recently launchedto draft, implement and evaluate poverty reductionstrategies demonstrated that SSEOs – andcooperatives, in particular – have not always beeninvolved in the proceedings (Develtere & Pollet,2008); this can be explained because cooperativesmay face a lack of federative (vertical) structures.However, it is of particular importance to consultSSEOs in the current negotiations on recovery plans,since they focus on economic and socialdevelopment in the long term, sometimes to agreater extent than other civil society actors, and theyare sustained by the confidence of their members,beneficiaries and users.

Finally, it is important to extend social dialogue, byconsulting with SSEOs, beyond the national level, tothe supra-national and international levels. It isthrough negotiations at these levels, and throughinnovative social dialogue practices, that jointsolutions can be found to the economic andfinancial crisis in the short and medium term.


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5.6 Key findings

� SSEOs, through their combined social andeconomic objectives and their functioningprinciples, are well-placed to contribute todevelopment policies and challenges, such aspoverty reduction strategies and millenniumdevelopment goals.

� SSEOs are contributing or could furthercontribute to implement a specific internationalframework, i.e. the ILO Decent Work Agenda andits four pillars: labour standards and rights atwork, decent employment and income, socialprotection and social dialogue.

� As employers, SSEOs are promoting labourstandards and rights at work by establishingparticipatory organizational mechanisms. Theyare also playing a key role with vulnerable groupsto whom labour rights are denied (e.g. informalworkers, migrant workers, children at work).

� Because SSEOs pursue both economic andsocial objectives, they play a major role increating and securing decent employment andincome. Within the SSE, cooperatives have beenmajor employers for years in several Northernand Southern countries. SSEOs also contributesignificantly to accessing resources (socialfinance) and creating markets (fair trade, greenjobs), education and training. There are alsoplenty of opportunities to help formalize some

informal units under social and solidarityorganizational structures and to enhance thedevelopment of local economies.

� In Northern countries, SSEOs are already majorplayers in providing social protection schemes(e.g. health insurance). In Southern countries,where there is a huge deficit in terms of socialprotection, SSEOs (e.g. mutual healthorganizations) strive to make social protectionschemes effective, affordable and accessible to awide range of people who are not covered by theexisting social security schemes. In somecountries, these efforts are articulated withoverall reform of social protection systems at thenational level. In other domains also (e.g.HIV/AIDS), SSEOs provide innovative services topeople living with HIV/AIDS and contribute to theimplementation of public health policies.

� The inclusive and transparent decision-makingand operating methods that characterize SSEOsestablish a culture of dialogue that could castnew light on governance and social dialogueissues. It could be in the interests of the classicaltripartite social dialogue structures to involve andconsult SSEOs, as well as other civil societyactors representing vulnerable populations in theworld of work. Collaboration between classicalsocial partners and SSEOs could be enhanced injoint efforts towards the resolution of socialeconomic issues.


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Documents

“Social and Solidarity Economy: Building a Common ......dimension of the Decent Work Agenda. Enterprises and organizations of the social economy create and sustain jobs and livelihoods,