Euskadi is a worldwide benchmark in the Worker cooperatives

We are interviewing the Basque Government Social Economy Director to find out what he thinks about the cooperative model and its weight and representation within Basque institutions, as well as the regional government’s different lines of action for the Basque cooperative movement.

As Basque Government Social Economy Director, how would you define the concept of Social Economy?

The “Social Economy” concept had and still has many meanings. Very often, it depends by whom and in which context it is being used. To be completely sure, legally above all, we should turn to Spanish Law 5/2011, of 29 March, on Social Economy that, on the one hand, uses the technique of referencing it to other guiding principles, so that when a particular entity is characterised by prioritising persons and social purposes over capital (specified in autonomous, transparent, democratic and participative management); paying out profit depending on the job; internal and external solidarity, with the surrounding society, encouraging local development, equal opportunities, stable and good quality employment, work/home conciliation and sustainability, in short, social cohesion, we can say that this is a Social Economy entity.

On the other hand, it identifies certain “families” that, to one extent or another, have been observing the aforementioned principles. The families/entities referred to in the aforementioned Law are: Cooperatives, friendly societies, foundations and associations that carry out economic work, labour-related companies, job-seeking businesses, special employment centres, fishermen’s guilds, transformation farming companies.

It think it is important to emphasise that, as appears in the regulations and I agree that, it is in any case the entities that will perform the economic and business activity and, fundamentally, they are characterised by being ethically responsible and economically sustainable.

Are Cooperatives a reference model within the Social Economy?

Data confirms this, particularly from the Basque Country, above all in terms of Worker Coops. According to the final report on the Basque Social Economy Statistics for 2016 and the Advance report for 2017, that are official statistics: 90.55% of the gross added value from the Basque Social Economy comes from Cooperatives and 87.5% of employment from the Social Economy corresponds to cooperative employment.

On the other hand, Cooperatives, also in the Basque Country, date back over a hundred years; they work in all economic sectors (and in many social sectors); they are structured and appear locally, nationally and internationally; and finally, they have a corporate identity comprising values and principles, defined historically and internationally, that inspire the very concept of Social Economy.

Is the Basque Cooperative Movement sufficiently represented in Basque institutions?

By means of its representative organisations, the Basque Cooperative Movement has been progressively accessing institutional fields where the people it represents are affected. In this term of office, a very important step has been made granting the cooperative movement access to the Basque Business Development Agency (SPRI) and the Euskadi School Council, and I am sure that the cooperative movement will also sit on the relevant bodies.

The new draft Bill to modify the regulation in force on Cooperatives in the Basque Country states, in Section III, that it regulates the cooperatives in relation to the administration, and as a promotion measure: “the institutional representativity of the Basque Cooperative Movement will be ensured, providing the presence of and contact with the cooperative movement in the different fields of consultation and decision-making and economic, educational and social institutional representation organisations in the Basque Country and their progressive standard-based consolidation.”

 

New Cooperative Law

When will the new Basque Cooperative Law appear?

It is envisaged that by the last quarter of 2018, the draft Bill will have been approved by the Basque Government. From there, it will make its way through the Basque Parliament, after a laborious procedure of reaching consensus and formal processing, always complex and time-consuming, as it affects multiple areas and Departments.

At this point, I would like to highlight the great effort we have made to reach almost full consensus with the cooperative sector on its different types of Cooperatives, plus clear backing from the Work and Justice Minister, María Jesús San José, to develop, promote and drive the economic and social interests that define this type of business that is intrinsically linked to the Basque Country and our economic system, namely cooperatives.

What matters would you highlight from this new legal regulation?

The reform is not complete and does not vary the basic structure of the current Law 4/1993, of 24 June, on Basque Cooperatives. It has the following main purposes:

  • Rework and integrate several legal modifications in a single regulatory text
  • Clarify important issues, such as the assumption of partners’ responsibility for social debts and any matters that affect the partner’s responsibility and assignation of losses
  • Review the legal configuration of certain classes of cooperatives to guarantee, not just make possible, that they abide by the organic and cooperative functional regime; such as the case of worker-owned housing and transport cooperatives
  • Adjust the Administration’s work, in terms of promotion and control of cooperative matters, to the current legal, economic and general institutional environment; plus help actual Basque Cooperatives develop as companies, identifying, promoting and guaranteeing the specific identity of these companies, which legitimately allows them to be considered to be ‘of social interest’
  • Inclusion of constantly, fast-changing general guidelines for company law, such as the case of regulating corporate government
  • Make it possible to self-regulate certain aspects via statutes or Internal Regime regulation or, when appropriate, within the Cooperative Movement
  • It is also a good time to introduce different legal-technical adjustments and improvements that make the standard more coherent and ease its interpretation and practical applications

Is the cooperative business model sufficiently well-known?

It’s clear that outside the social economy field, nobody knows anything about these different ways of running a company, although people have a vague idea – in the best cases – about the cooperative model, its meaning, how it works and virtuality (what it brings to its members and to the company), all whilst taking into account that Euskadi is a worldwide benchmark for Worker Cooperatives. In fact, next year, we have planned to run a dissemination campaign on the Social Economy, focussing particularly on the Cooperative movement.

Historically, a wide range of work has been done, with public support, by entities that represent and defend their interests. And, right now, there’s a new drive from the Social Economy Board, clearly seen in a variety of projects aiming to raise awareness and highlight another way of running a participative, democratic business in terms of management or production, nevertheless referring to the Social Economy, where the central role of the Cooperatives will be demonstrated, as mentioned previously.

Does the Basque Government have support programmes to set up new Cooperatives?

In this financial year, as in previous years, following identical criteria regarding the scope, beneficiaries, forms of entrepreneurship, etc. the order of 18 July 2018 from the Work and Justice Minister, within the Social Economy funding, which calls for bids on, and regulates the funding to do business in, the social economy and for planned territorial promotion of social economy companies. The order was published in the BOPV 144 (Basque Gazette), on Friday 27 July 2018.

In addition to the entrepreneurial line, there are five other calls for funding to promote the social economy and the cooperative movement from different fields of action. For this funding, the budget has been increased by €582,800 compared to 2017, representing a 15% raise.

 

Young people and Cooperatives

Do you consider that the cooperative movement is an attractive model for young entrepreneurs?

Entrepreneurism in general is an excellent alternative to generate employment and wealth. If it is developed by setting up Cooperatives driven by young people, I think that it provides great added value, due to the actual features of the Social Economy.

According to some studies that we have run on the youth/cooperative dual aspect, there are three types of young people aged between 15 and 24 years old in our environment: “conservative by integration” (22.1%), “altruistic conservatives” (8%) and “rebels with a cause but a bit confused” (21%). These percentages are thought to constitute a good basis for grasping the cooperative spirit.

Cooperatives can help improve young people’s lives, providing aspects such as employment, and a flow of participation, assuming responsibilities, training, management experience, etc. In turn, young people have a lot to bring to the cooperative movement. They are its future. They can provide ideas, perspectives, skills and training, knowledge of instruments, digital strengths, excitement, commitment and leadership.

For all these reasons, we are going to drive a project in the near future to develop entrepreneurism in social economy terms. We will bring this informative work on the social economy, and the cooperative movement in particular, to all development agencies, BIC, berrigunes and entrepreneurship centres, as well as agents involved in developing entrepreneurship.

On the other hand, there is the draft bill that regulates a new type of Cooperative called “Junior Cooperative”. It is defined as a cooperative promoted by students in a practical attempt to apply the skills and knowledge they have learnt in schools and universities, by developing business activities intended to produce goods or provide services.

This aims to accurately regulate the aim and purpose of this type of Cooperative and the legal position of partners.

In this respect, I consider that these promotion campaigns should be permanent and not limited to circumstantial situations. For example, we have seen that at the worst points of the recession, social economy businesses were still being set-up. As Basque Government Social Economy Director, I consider that there is a long way to go. I am entirely convinced that, with more social economy companies, we will have a fairer, more supportive and socially responsible society.

 

Jokin Diaz Arsuaga
Basque Government Social Economy Director

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