ACTS OF PARLIAMENT AND THE STATES

DO ACTS OF PARLIAMENT AND STATES GET DISTRIBUTED TO THE PUBLIC INTEREST GROUPS AND THE PUBLIC WELL IN ADVANCE BEFORE THEY ARE TABLED FOR ADOPTION AND PASSED INTO LAW - OR LATER BY WHEN IT IS TOO LATE TO ADDRESS AND REMEDY THE PROBLEMS CREATED BY THE ARMCHAIR BEURAUCRATS.

The Act applied in the case of the doctor recently jailed for not registering his clinic was passed in a manner typical of our Parliament – legislation was drafted secretly and surreptitiously and then rushed through Parliament.

Obviously, no one has the chance to read drafted legislation nowadays. And many don’t bother reading the drafts because they may be too busy scrounging around for other favours. Many do not even dare ask that drafts be posted for public scrutiny and comments as they would in civilised societies.

Laws must be passed only after they have had the consent of the governed, not the consent of those waiting for contracts and other perks. Drafted laws must be circulated well in advance to the public and civic groups so that people with a greater interest in the subject – and people whose love for their country is greater than their love for contracts and perks – have a chance to study and discuss the legislation.

It is apparent from the many bills that just fly through Parliament, that no member of the cabinet really takes a serious interest in reading drafted bills. Bills also receive rushed readings as evidenced in many cases.

The law passed by Parliament that might have lost this country a good doctor is a fine example of the ludicrous manner in which Acts are drawn up and passed.

THE COOPERATIVE SOCIETIES (AMENDMENT) ACT 2007 AND THE SURUHANJAYA KOPERASI MALAYSIA ACT 2007

Soon, two more rashly-passed bills – the Cooperative Commission Act 2007 and the Coooperative Societies (Amendment) Act 2007 – will pose problems for the more than three million people who are members of cooperatives in this country. Both bills are designed to strip cooperative societies of their funds for use by a bunch of bureaucrats who have no clue about managing or operating cooperative societies in real life situations.

Some urban cooperative societies have existed for more than 80 years, and many members have saved for their retirement and other needs exclusively through the cooperatives.

The two Acts were never brought to the public’s attention or to the attention of the more than 4,000 cooperative organisations in the country. Apparently, they were discussed with certain academics with little knowledge on how to manage and operate cooperatives.

Now that cooperative members are aware of the new legislation, cooperatives are finding themselves inundated with applications from members wanting to resign and withdraw their funds. This may portend the doom of voluntary cooperatives in the urban sector.

Without funds, and without the zeal of the cooperative members who manage these large public sector cooperatives, the movement will slowly cease to exist in this country.

Cooperatives in rural areas may creep along for sometime before they too wither and pass away. This will mean the end of the cooperative movement in Malaysia and the end of an era.

Long live the meaningless bills that are hurriedly passed by our ever alert members of Parliament!

THE SOCIAL CONTRACT - HOW DOES IT AFFECT CO-OPERATIVES

Man is born free, but everywhere he is in chains." - Jean Jacques Rousseau, 'The Social Contract'

The social contract is nothing more or less than a vast conspiracy of human beings to lie to and humbug themselves and one another for the general good. Lies are the mortar that bind the savage individual man into the social masonry." - HG Wells, philosopher and science fiction author.

How committed must an intellectual be? How passionate a life must an academician live? How incorruptible must one's ideals be in face of a country such as Malaysia whose government is at the brink of what Mekkah was at the time of the emergence of Prophet Muhammad (Peace be upon Him)?

These are my thoughts upon hearing that Dr Syed Husin Ali is launching the latest edition of his classic work on the analysis of the Malays.

I did not get the chance to become a student of Syed Husin, whom I have never met but have known through his writings. He would be on the top 10 list of those I would like to meet. I would have been a different student had I been guided by this man; one of the most respected public intellectuals Asia has ever known. He is an Antonio Gramsci of our times.

His story of his year of detention under the government-blessed instrument of dehumanisation called the Internal Security Act, is poignant. I was perhaps 11 when the ISA arrests happened. He will go down in history as one of the most conscientious intellectuals whose passion must be emulated. I was fortunate not to be ISA-ed. My passion must now be to write about the abolishment of the dreadful Act. That's the sacrifice Syed Husin has taken in order to get one's message of social justice and committed intellectualism across.

Syed Husin's thesis

In The Malays, their problems and future, Syed Husin developed the thesis that arguably explained the predicament of the contemporary Malays. He looked at the structure of domination that has plagued this race from feudal times immemorial. Reading Syed Husin is like reading Karl Wittfogel, Antonio Gramsci and Fredric Jameson all in one. In his seminal work, Syed Husin presented a genealogical order of the Malays, dissected its historical-materialistic dimension, provided a critique of the nature of elitism vis-a-viz pattern of ownership, and lastly presented a perspective of change that gives hope to this race that has been disgraced by its own political elite.

Like Wittfogel, he looked at society as an evolution of an entity in which the agriculture and maritime power not only gave rise to feudal lords but industrial power gave birth to the total power of the ruling regime; one that controls not only the productive forces of society but also created the religious class that culminate in the present day branded-religio-political ideology of "Islam Hadhari."

Like Gramsci, Syed Husin wrote about the emergence of the "hegemony of the ruling class" particularly in the Mahathir Administration in which what is projected to the masses is an image of "benevolence albeit authoritarianism" and the perception of "moral and intellectual leadership" foundation upon the power of Fordist industrialism, encultured in the image of production of goods such as national cars, microchip and tallest towers.

For 22 years, Malaysians were fed with this perception of the success of the Malays. Syed Husin meticulously analysed. Mahathir’s "Malay dilemma", Sanusi Junid's "Mental revolution" and Malik Munip's "Ketuanan Melayu/Malay dominance" amongst the leit motif of this new era of Malay industrial bourgeoise-ism that contributed to the near-destruction of this race itself circa 2008.

Like Frederic Jameson’s work on the cultural logic of late capitalism, Syed Husin wrote about a Malay history that marginalised the people and glorified the advancement of capitalist ideology, creating classes with material and cultural capital.

What went wrong with the Malays, as Syed Husin has analysed on a tour de force of Malay cultural analysis? What then must the Malay do, as he proposed as well?

The problem lies not in the here and now but in the past; one that needs to be de-constructed and reconstructed. It lies in the Malay psyche. It lies in the notion of hegemony as it relates to the political-economy of totalitarianism and controlling interests that continue to cement the master- slave narrative/relationship of the ruler and the ruled. That master-slave narrative has become a technology of psycholinguistic control and institutionalised as "culture".

The Portuguese, Dutch, Japanese, and British colonialists succeeded because the fertile ground of the slave mentality is already prepared historical- materialistically. We can see this mentality in the idea that a Malay political leader must not be challenged (such as in case of the presidency of the Umno) and this is a manifestation of this neo- feudalism hypermodern inner construct of the Malay in the Age of Cybernetics. Let us further analyse this psychological contradiction, using current perspectives of hegemony the Malays must learn to use in order to move beyond this non-issue of Malay politics.

The "Either-Or" illusion/dimension of the Mahathir-Abdullah problematique is not the issue. This is merely a manifestation of the shadow play of the "winners of history", and in what French sociologist Pierre Bourdieu would term as the "habitus" and the 'disposition' of the neo-feudal Malay mentality that will require a Lacanian (postmodern psycholinguistics) analysis. The character of the controlling interest, for example, in the issue of the Johor half bridge presents us with a holistic picture of the immense success of the collaboration between the ruler and the local political-economic elite in making sure that hegemony is maintained for material gains.

The common Malay does not need emotional outbursts or a Cold-War-ish 'amuk' as a tool of analysis, rather they need an excellent view of their own socio-psychological history to establish an even better foundation of a new society. At present, because of the moral bankruptcy of their own leaders, the poor common Malay is unfairly carrying the image of a 'silently-reproduced' people who are betrayed by their own 'nationalists' – all in the name of Takkan Melayu Hilang di Dunia. ('The Malay Shall Never Perish from this Earth'): a leitmotif of thought-control that masks the historical-material-political-economic nature of structural violence.

The non-Malays must understand the predicament from an intellectual perspective and must learn to arrive at a common ground to help each other progress to eradicate poverty and restructure society. We might have misunderstood each other based on selective historicising that have been produced as artifacts and historical facts and disseminated to each generation. The only history we know in short is the history of the ruling class.

At every epoch in history it has been such. The winners write history, the losers write poetry or study anthropology. Even the non-Malays have their own master-slave narrative and their own history of 'mental enslavement' that they need to reflect upon, revolt against, de-construct, and reconstruct so that only the signs, symbols, significations that are truly 'humanising' will be allowed to flourish.

The Yap Ah Loy symbolism of the 'founder' of Kuala Lumpur is a convenient mask of history that hides the structural violence embedded in the war over the control of tin mines. The history of the indentured servitude of the Indians in British Malaya is presented as 'facts' and seldom as narratives of human suffering and bondage in the historical march of progress of the American automobile and canning industries.

But how have the Malays been hegemonised and mentally imprisoned by their own rulers? We need to look at what 'hegemony' means; a term usually popular in international relations but ought to be extended into the realm of psychological construct in the analysis of cultures. Writings on the idea of hegemony, with its Greek root word 'hegemon' meaning 'lead', have mainly been popularly attributed to the work of the Italian intellectual Antonio Gramsci. For him, 'hegemony' represents a moment in history, or a 'historical bloc' in which the leader (in this case Mussolini,) gains acceptance based on his ability to lead, morally and intellectually, even in fascistic circumstances, as in the case of Mussolini, a Fascist Italy.

The status of civil society is achieved when the masses or the people accept the ideas of the ruling class (the regime and its doctrine) as common sense. As I have alluded to earlier passages above, the circumstance of the acceptance of this condition, according to Gramsci, is made possible with the dominance of 'Fordism' (the ideology of the modern system of production based on the influence of Henry Ford's automobile industry) as a common-sensical ideology; of which man's creative instincts are controlled, through a rationalisation process ideologised by Fordism and Americanism.

Common sense allows the Malays to accept politically whatever fate has dictated for them to behave. Historically however, the idea of hegemony is certainly not new. Religion, myth, and the supernatural have played their hegemonic role in maintaining a common-sensical view of how human beings should be cast and ordered on the ladder of existence and how to behave or be controlled socially and politically. The idea of the 'divine rights of kings' in the Middle Ages, is illustrated in the classic example of France's Louis XIV, 'The Sun King' who ruled for 72 years from the age of four, or universally, as in the case of the feudal monarchs in China, Japan, and India.

In Karl Marx's later writings, the analyses centered around the relationship between the development of classes to the maintenance of the ideology produced by the ruling class through hegemonic formations that correspond to the mode of economic production. In a similar vein, the French Enlightenment thinker Jean Jacques Rousseau wrote about hegemony in his idea of the 'social contract' in which the ruler and the ruled are bound by a covenant that would facilitate the maintenance of an orderly society. In modern times, the media especially television, plays its role in maintaining the hegemony of the advanced capitalism.

In the case of the Malay society, the idea of hegemony or 'political common sense' can be traced to the myth of the covenant between Sang Sapurba (the mystic/ philosopher-king) and Demang Daun Lebar (the ruler/representative of the people) in which the myth states that as long as the leader is just, the people will not depose him. Hegemony is also achieved through the installation, imposition, and inscription of the British colonial mode of production that put the class of colonial serfs or indentured slaves (paddy farmers, tin miners, and rubber tappers) in an orderly and appealing master-serf relationship.

The Algerian thinker Albert Memmi would term this as a classic coloniser-colonised relationship. Daulat, which connotes 'the divine rights of the Kings' is the hegemonic state of political being-ness wrought upon the Malays, especially during the Melaka sultanate spanning to the present day of the reign of the constitutional monarch and the nine hereditary rulers. Hang Tuah was too blind a hero. If in the days of the Sultanate of Melaka, daulat played its role as a hegemonising strategy similar to that of the concept of the 'divine rights of kings' in modern Malaysian political context, the modern state or the kerajaan (a synthesis of the concept of kingdom and statehood) operates to maintain that hegemony.

The idea of daulat is cleverly inscribed onto the consciousness of the Malays. A good citizen is defined as one who is law abiding, God-fearing, and one who pays total allegiance to the Malay sultans or raja and the constitutional monarch such that to question the supremacy of the rule of the ceremonial king would be culturally prohibited. In many an analysis of the transformation of the Malay society from the times of the Melaka Sultanate to the emergence of the Malay nationalism we find the conclusion of the idea of a good Malay subject is one who surrenders total obedience to his or her Ruler (the sultan or the Raja).

The king is said to be '(Allah's) representative on this earth' and is thus bestowed with the Divine Rights. Social status is calibrated based on the sophistication of the signs and symbols of the Malay sultanate.

For example, royal awards are presented yearly to those who have demonstrated good service and relationship to the constitutional monarchical system. Upon receiving these awards, some recipients would even be given honorific titles. Many will use their honor to dishonorably gain economic privileges. The notion of the daulat or the 'divine sanction' still continues to this day.

The concept of a hero in Malay society is enshrined in Hang Tuah, the most popular symbol of the warrior-class in Malay history; the good 'polyglot', the magical-mystical Malay hero who pledged blind loyalty to the Sultan. The image of the warrior-blind loyalist is well-inscribed into the literature and consciousness of the Malays.

Today, enshrined, is the modern-day doctrine of allegiance to the ruler in the form of the Rukunegara or the 'Principles of the Nationhood'.

The myth of Hang Tuah, arguably, together with his friends Hang Jebat, Hang Lekir, and Hang Lekiu has been inscribed into the consciousness of the Malays and forms the foundation of the master-slave narrative. The ideological state apparatuses are employed to advance the economic development of the nation as well as to maintain social order so that the state can continue to pursue its development projects along the lines of state-sponsored capitalism that is increasingly taking the character of the corporation nation-state coloured by politics of race; a system that continues to prosper via a tight nexus between politics and business.

The Mahathir-Abdullah dilemma is a Malaysian dilemma that signals a breakdown in the political economic system; one that reduces the multiculturally impoverished into statistics of the New Economic Policy and glorifies individual political leaders as 'captains of industry' and 'nationalists' drowned in the wave of globalisation.

The history of the people of Malaysia, and especially of the Malays, must be rewritten in order for the marginalised, the enslaved, the colonised, and the wretched to be allowed to speak up and tell us what a more progressive historicising means.

A required reading

The perspective above provides an enrichment of the arguments put forth by the author of The Malays: their problems and future. Syed Husin Ali, the most respected committed intellectual has not only provided a critical analysis of what the Malays have gone through but what lies ahead particularly at this "defining" moment in which the Malays have finally realised the mental structures that are shackling them; structures built by the individuals and ideology that grew out of the historical and material conditions that too, must be deconstructed.

Syed Husin Ali's The Malays: their problems and future is a must reading for all Malaysians wishing to understand the predicament this country is in.









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ARM CHAIR CIVIL SERVANTS DEVISE CO-OPERATIVE LAWS

THE COOPERATIVE ACT (REVISED) 2007 MAKE THINGS LOOK SO EASY FOR ARM CHAIR GOVERNMENT SERVANTS WITH NO KNOWLEDGE OF MANAGING AND OPERATING CO-OPERATIVE ORGANISATIONS.

CCB COLLAPSED IN 1983. A NEW ACT CAME UP IN 1993. { THEN HOW IS THE COOP ACT 2007 INVOLVED WITH CCB.}

PULLING WOOL OVER THE EYES OF CO-OPERATORS.

The government recognized the cooperative movement as the third sector of the economy. As of 31 December the movement’s 5,861,000 members in 4,918 co-op societies generated RM7, 359bil in share capital with fixed assets of RM38bil.

Due to the instability caused by the mismanagement and corruption scandals of the 1980s, a new Cooperative Commission was passed by parliament.

It seeks to oversee and regulate cooperatives under the Cooperatives Act 1993, which is under amendment. Such regulation was due to the collapse of the Central Co-operative Bank (CCB) in the 1980s which caused others with dealings with it to be in trouble. Misappropriation of funds and mismanagement continue to plague the movement.

The new Commission is perceived to have flaws which need to be rectified opined a forum on cooperative societies. The details of the Cooperative Commission especially the 26 areas of prosecution for those found in breach of Cooperative laws was a point. A panel speaker pointed this as "too severe" for it could cause officers, many of whom held positions voluntarily, to shy away from top posts. { NOTE: This is what the powers that be want. So that cronies can take their places.}

The National Cooperative Organization of Malaysia (Angkasa) was criticized for failing in its role as an apex body to inform its members of changes.

A panel speaker said the ministry consulted Angkasa on the changes and inclusions but the members were not told.

New funds as the Co-operative Deposit Account (CDA) and the Central Liquidity Fund (CLF) were set up under the new law, requiring cooperative societies to put their finances in their own statutory reserve fund while "excess" monies are put into the CDA.

Referring to the Cooperative Development Trust Fund (CDTF) and the Cooperative Education Trust Fund (CETF), the Movement has not been told how their contributions to the two existing funds were used.

While monies in their Reserve fund, were used for investment, leaving it in the CDA would hinder the growth returns. These real concerns affect the members who are mainly from the lower income group and senior citizens.

Angkasa deputy president Prof Dr Mohd Ali Baharum said "there was nothing to worry about if co-op society leaders played by the book."

As for the CDTF requiring a 1% contribution from their net profits and the CETF, a 2% contribution, Angkasa general manager Nasir Khan Yahaya explained both were managed by committees appointed by the ministry. ( Who know nothing about physically operating and managing businesses.)

"We request finances to fund our educational programs from the CDTF through the committee," Nasir said. "We have nothing to do with the CETF that is used to run the Cooperative College of Malaysia. In all only 3% is going out of their coffers for the good of the movement as a whole."

Whereas contributions to the CDA and CLF, Nasir said, would belong to the society but be held in trust by the Ministry for better usage. For e.g. the CLF would be used to help co-operative societies with liquidity problems as a last resort. { If the have liquidity problems they should be closed. Not allowed to continue to survive on other people's monies.}

Besides which only large cooperative societies and credit cooperatives need to contribute to the CLF.

While co-ops needing funds for investment purposes could borrow from the CDA. "At the end of the day, the interest earned from lending activities sourced from these 2 funds would filter back to co-op societies by way of returns on savings," clarified Nasir. (Provided that the Borrowers have the decency to pay back the loans in regular instalments - which seldom ornever happens. Look at Koperasi KOBENA Berhad and Koperasi KOPEMA Berhad and many other Co-operatives of similar ilk. Their gut feeling: " Not our money - So why Pay? The Government will look after us as they have been doing the last 50 over years.)

In regard to members not being notified on the law, Prof Mohd Ali said it was not their place to do so prematurely, as it has not received the royal assent. ( NOTE: There is a limit to such nonsensical replies. Surely the members and the public should know before Laws are enacted - NOT AFTER - so that cronies benefit.)

When that is done Angkasa will undertake programs to orientate our members on how to deal with the chances. Allegation the members concerns and input were not solicited before Angkasa members went to the negotiating table to deliberate on the new act, prompted Prof Mohd Ali to clarify the apex body was aware of the issues faced by members which were raised regularly at annual general meetings. ( NOTE: Members of the Apex Councils are famous for collecting fabulous Allowances and gallavating on "Lawatan sambil belajar" and coming back with no input all to the Co-operative Movement.)

"For instance our members told us they wanted a fund set up as a backup in case certain co-operatives needed finances and that is how the CDA and the CLF came to be."{ NOTE: SO WHY RIP 50% of a Co-ops Funds to give to Co-ops that CANNOT LOOK AFTER THEMSELVES.)

It is fallacious to fear the Commission and the amendments to the Cooperative Act 1963 may stifle the industry. In conclusion it was said "it will be imperative for the guardians of the Cooperative Commission especially those who will be looking after the CDA and CLF to ensure all contributing societies are given the same treatment when the time comes for them to dip into these funds."

Transparency must be the keyword here. { This word does NOT exist in Malaysia.}

In the meantime cooperative societies were advised to obey the new rules before they cast their verdict. After all, there is provision in the law for the minister to implement it accordingly.

RECOMMENDATIONS - 8TH ASIAN CO-OP MINISTERS' CONFERENCE

8th ASIAN CO-OPERATIVE

Ministers’ Conference
12th to 15th March 2007, Kuala Lumpur , Malaysia

Recommendations

8th Ministers’ Conference on Co-operative Legislation and Policy was held in Kuala Lumpur from 12th to 15th March 2007.

The conference was organized by the Ministry of Entrepreneur and Co-operative Development (MECD), Government of Malaysia in collaboration with the ICA Asia Pacific and ANGKASA the National Co-operative Organization of Malaysia.

The main theme of the conference was “Fair Globalization through Co-operatives”.

In all 311 delegates from 22 countries including Hon’ble Ministers Incharge of Co-operative Development from seven countries in the region attended the conference.

The idea of conferencing on vital issues before the co-operatives came in the year 1990 in the background of co-operatives having received preferential support & financial assistance from governments and in turn governments overwhelmingly protecting and supporting the co-operatives with financial assistance, managerial support and tax benefits to promote income opportunities, equality, justice, social equity & social responsibility.

The main purpose of the Ministers’ Conference on Co-operative Legislation and Policy that is organized every 4th year is to understand the priorities of the Governments and assert the advantages of co-operatives in building national economy.

The main objectives underlining the conference include:

• developing conducive and progressive co-operative policies and enactment of proactive legislation reforms;

• enabling co-operatives to adapt with the fast changing global scenario;

• creating a platform at international level for governments & movements to discuss key issues hindering the development of co-operative sector.

The 8th Ministers’ Conference was concluded with the following declaration:

• Noting the multi-dimensional impact of globalization on the socio-economic lives of peoples of Asia and Pacific and their institutions particularly cooperatives;

• Taking note that while globalization and liberalization of national economies has resulted in enhanced economic growth and prosperity, its gains have not been equitably distributed among the people particularly the poorer and more vulnerable sections of the community;

• Appreciating the desire of the Cooperative Movement to participate in the developmental process in harnessing the gains of globalization aimed at poverty reduction, employment generation and equitable national development ;

• Realizing the importance of proactive cooperative legislation and enabling policies for creating conducive environment for development of cooperatives;

• Appreciating the role of ICA to continuously facilitating the dialogue between the Cooperatives and the Governments to enhance the role of cooperatives for the economic growth and prosperity in the region.

We, the participants of the 8th Ministers Conference on “Cooperative Legislation and Policy” held at Kuala Lumpur, Malaysia from 12-15 March 2007:

Urge upon the Governments to catalyze the process of re-orienting the Cooperative Legislation and Policy to strengthen apolitical and autonomous character of cooperatives and to provide a positive level playing field to cooperatives to enable them to compete in the globalize market.

Call upon the Cooperative Movements to contribute effectively in the process of economic development, amongst others, by organizing small producers including farmers, workers and protecting consumers through self-help mode and also ensuring increased participation of women and youth in the cooperatives.

Exhort Cooperatives and Governments to strengthen management capacity, participatory governance and fair business relationship for ensuring healthy functioning of cooperative system through innovative strategies.

Calls upon Cooperatives and Governments in the region to periodically review the efficacy/effectiveness of Cooperative Legislation and Policy as well as to introduce appropriate reforms considering the dynamic changes and trends emerging in their respective national economies.

Recognizing cooperatives are an important and significant sector of the national economy effectively contributing to its development, we affirm our support for the Cooperative Movement as a sustainable and efficient institution through:

1. Encouragement of cooperative entrepreneurship by inculcating entrepreneurial spirit and skills among the members, leaders and managers of the cooperatives through education and training.

2. Attainment of economies of scale and strategic business alliances among cooperatives both domestically and internationally.

3. Role clarity among different tiers to enhance impact of the Cooperative Movement and

4. Harnessing the gains of the fair globalization and liberalization for the benefit of members.

The conference witnessed intense deliberations among the participants and culminated with the group reports on the expectations of the co-operatives from the government and that of the governments from the co-operatives.

The group reports and the interventions by Hon’ble Ministers have formed the basis for the set of following recommendations for the consideration and adoption at the level of the governments and co-operatives:

1. Clear Policy on the Co-operatives:

a. There should be a consistent national policy, recognizing the distinct character of co-operatives as private self-help organisations, operating according to their own rules. Such policy should allow co-operatives to work in all fields of human endeavour and open co-operatives for all citizens.

b. The legislation on co-operatives may be amended only after adopting a conducive national policy on the development of co-operatives.

c. Government’s co-operative development policy should be expressed in clear terms in writing, either in a policy paper or a preamble to the co-operative law.

d. There should be a periodical review of policy and law. The co-operative movement should be invited to participate in policy-making and law-making processes.

e. The policy statement should define what a co-operative is (as what co-operatives are recognised) and what is the role of government vis-à-vis co-operatives.

f. The role of co-operative apex bodies as legitimate representatives of the interests of affiliated societies and their members should be recognized.

g. Based on the principle of subsidiary, the government should allow the self-regulation of the co-operative sector as a mechanism to strengthen the self-reliance of co-operatives within the legitimate legal framework. In that spirit, government should authorize apex co-operative organizations to regulate (not control) the affiliated primary co-operatives.

h. Governments should introduce support measures for co-operatives, where appropriate, for the activities that meet specific social & public policy initiatives e.g. livelihood creation for the disadvantaged section of the society, tax benefits, soft loans, access to public works programs and special procurement provisions.

i. Since the co-operatives combine business and moral values together with ideal governance structure hence should be the most preferred choices in more holistic socio economic development of a country and also in guarding the globalization process.

j. Considering the size and capacity of the co-operative movements in the developing and emerging market economies, co-operatives must diversify into innovative sectors like infrastructure building, service industry, disaster mitigation and preparedness, formal schooling, education and health care.

2. Political neutrality

a. The principles underpinning the co-operatives stress independence of co-operatives, which implies among other things that co-operatives should stay aloof from party politics.

b. The issue of political neutrality of co-operatives means that; co-operative office should not be used as a stepping stone for pursuit of political careers; co-operatives should not be used as instruments for the implementation of political programs and; co-operative leaders should not be used for political aims.

c. Co-operatives must use their weight as a socio-economic movement to lobby for favourable framework conditions like the UK, the cradle of co-operative democracy, there is a Co-operative Party working together with the Labour Party and in Italy and Belgium co-operative groups are organised along the lines of political party programs to build an alternative economic force to lobby for favourable legal, economic and social framework conditions for this sector of “social economy”.

3. Drafting Co-operative Law:

a. The relationship between government and co-operatives must be defined in the co-operative law. Each has to be given its role. Clear limits have to be set regarding government’s powers, especially the power to control and make amendments under the law.

b. Type of law: Co-operative law is organisation law, which has to offer a reliable and lasting legal framework for co-operatives. It should be avoided to mix provisions of organisation law with elements of tax law and regulations for the promotion of co-operative development.

c. Format of law: The options are one general law for all co-operatives or several special laws for different types of co-operatives. In case of several laws, they should follow a similar basic concept.

d. Relations between law, regulations and by-laws: It is important to find the right dose of regulation, avoid over regulation and leave room for autonomy to adjust the provisions of the law to local requirements in the by-laws of individual societies.

The right dose of regulation and autonomy means: Co-operatives must be given autonomy to make by-laws within the boundaries set by the law. Such boundaries are justified if they protect -the special character of co-operatives as a type of organisation, members’ interests, the rights of creditors and the interests of the general public.

e. Law can serve as a checklist to determine - how far autonomy of co-operatives can go and how far restrictions of autonomy are justified.

f. Legal drafts-persons: When drafting co-operative legislation, it is essential to bring the text of the law within reach of the ordinary citizen and co-operator. This means that the law has to be worded in clear and simple terms and avoid heavy technical language (law for citizens not law for lawyers); to avoid high level of abstraction but rather use examples and to avoid cross-references to other laws and within the law. Legal drafts-persons should work in collaboration with specialists from the co-operative movement and should take part in preparatory discussions to learn about the subject matter they are asked to regulate.

4. Contents of Co-operative Law (Issues to be dealt with in co-operative legislation)

a. Definition of co-operative society: The law has to give a clear definition of co-operatives. This can be done by using the generally accepted definition of co-operative society as contained in the ICA Statement of Co-operative Identity.

b. Formation of co-operatives: The law has to provide the tools to determine what is a genuine (bone fide) co-operative e.g. pre-registration audit, need for approval before registration, need to meet certain minimum standards like minimum number of founder members (not too few, not too many, depending on type of co-operative and circumstances).

c. Formation procedures: The requirements to be met before registration should be spelled out in the law, reflecting registration policy. Minimum capital requirements vary from case to case. Therefore, the amount of capital required to start a co-operative should not be fixed in the law, but rather be assessed on a case-by-case basis during pre-registration audit. Bureaucratic obstacles should be avoided.

d. By-laws: The minimum contents of the by-laws have to be defined in the law. However, autonomy is needed to adjust the general provisions of the law to the needs of the specific case. This autonomy should not be unduly restricted by making the law too comprehensive, by detailed regulations or by compulsory model by-laws.

e. Membership, acquisition and termination, rights and obligations: It should be taken into consideration that members are the crucial part of co-operatives. Active membership must be mandatory and members’ interests need to be the driving force behind genuine co-operatives. Interventions must be spelled out to enhance the ability of co-operative leaders to make membership meaningful, in particular to offer a co-operative advantage (membership value, benefits exclusively for members) and to attain member-oriented effectiveness.

f. Equal status of members should be a basic co-operative rule. The importance of active membership, conditions of eligibility, provisions of associate members and transactions with non-members etc must be clearly explained.

g. Business with non-members should not be a barrier for growth. But of course, free riders should not be encouraged. In this regard co-operatives should be prudent enough and maintain their specific profile even while dealing with non-members.

h. Governance: Leadership of elected and democratically controlled office-bearers being a valuable asset and distinctive feature of the co-operative must be protected by the law. Co-operative law must set the framework for election of trustworthy leaders, standards of good governance, accountability and liability of office-bearers by defining - conditions for eligibility to co-operative leadership posts, the term of office (to be fixed in the law or left to be fixed in the by-laws), powers and duties of office-bearers and their liability, remuneration of services (whether paid or honorary, unpaid services), transparency by submitting data and reports to the general meeting, to auditors and to the general public, sanctions against illegal and corrupt practices, member control and minority rights.

i. The relationship between elected directors with professionally qualified and employed managers must be dealt with in the law, laying down what should be the rule and what could be exceptions, setting out who decides the policy and who executes the policy.

j. Audit and supervision: In co-operatives, regular annual or bi-annual audit is a must. The law should regulate, who carries out the audit (specially trained co-operative auditors cum advisers or certified public accountants), the scope of the audit (only financial audit or also management audit, audit of member-oriented effectiveness and social audit) and the scope of supervisory powers of the government agency in charge of administering the co-operative law (inspections at any time, inspections during audit or in case of inquiry).

k. Rules against demutualization: The law should not allow transforming indivisible co-operative capital, accumulated over the years from undistributed surplus, into divisible capital that may be distributed among the current members by transformation of co-operatives into companies or by dissolution. Either such decisions should not be allowed at all or only if a quorum of two thirds or three quarters of all members attend the special general meeting convened for that purpose and vote with a two-thirds or three quarters majority.

l. Merger, dissolution and liquidation: Standard regulations can be used taking into consideration the need of protecting minority rights and the rights of creditors.

m. Women Participation: Women’s role in society is an issue that reaches far beyond co-operative law. Usually, equal rights of women are guaranteed in the constitution. These rights have to be respected by all laws including co-operative law. For co-operative development policy and co-operative law this means that all rules and provisions have to be avoided, which discriminate against women, e.g. in conditions of admission to co-operatives as members.

5. Globalization & Co-op Advantages:

a. In the era of globalization the co-operatives must see it as an opportunity for all the co-ops to highlight and capitalize the CSR aspect of co-operatives evidently distinguishing them with other corporate structures thereby giving them a competitive edge.

b. Co-operatives must adopt universally acceptable standard code of co-operative governance (being more effective than corporate governance) and co-operate globally to protect the interests of most vulnerable section of the society and must incorporate it as one of the guiding principles of co-operatives in the ICIS.

c. Governments should move forward with proactive approach towards serving the interests of poor by creating a harmonious society through co-operatives duly protecting the livelihood of informal sector in rural and urban areas and attaining uniform growth of the society.
d. Governments must involve co-operatives in the WTO round of negotiations on critical issues bothering the small producers, consumers and farmers.

e. Requirement of the World Trade Organization and Agreement on Agriculture necessitates examination of issues such as market access, domestic support, export subsidy, trade related aspects of intellectual Property Rights, sanitary and phytosanitary measures including specific Agreements on varied commodities.

f. Co-operatives at international level must consider the option of setting up “International Co-operative Joint Purchase Union” to transact the procurement and supply of processed farm produce, consumer goods, services etc. in different countries since it will substantially reduce the costs and improve the profit margins.

g. To increase competitiveness of the co-operatives due to structural distinction in the market oriented economy, ICA must create an International Co-operatives’ Commercial Site on its website as hyper link for maintaining a knowledge bank to bring harmony in the co-operative laws of different countries, undertake structural advancements, innovative diversifications and promotion of international trade activities of co-operatives.

h. In order to spread uniform benefits and advantages of globalization, there is a need to establish International Co-operative Bank to financially back up the developing co-operative economies in the world and more so in the terrorism vulnerable and disaster prone countries.

6. Contradictions and Dilemmas:

a. Government expectations and co-operative autonomy: Government expects co-operatives to carry out their operations in line with government’s policy. Government is expected not to interfere in co-operative affairs, except when co-operatives ask government for assistance.

b. Democracy and efficiency: In the event there are no persons with the required qualifications among the members to take on the leadership the option of inducting external directors to join the co-operative to train and groom leaders inside the co-operative movement may be tried.

c. Co-operatives and poverty alleviation: Poverty is not only a problem of lacking resources but also of lacking ability to cope with change. Part of the answer is capacity building. Another means to help may be to provide promoters/development entrepreneurs with capital assistance. If co-operatives are involved in poverty alleviation campaigns, it has to be clear who pays the extra (social) cost: the members, if they so desire or the agency asking co-operatives to become active in this field.

d. Who can promote co-operatives? Promoting co-operatives requires special skills that have to be learned. Therefore, promoters of co-operative development must be trained for their work and need special service conditions to be motivated for their difficult and challenging task. Offering suitable service conditions for co-operative promoters may be more important than offering a suitable co-operative law without an efficient service to administer the law. Co-operatives should be encouraged to enter into strategic smart partnership with private sector in a win win situation to leverage on respective strengths.

e. Limits of co-operative autonomy: There is a need to find the right balance of guidance and supervision of co-operatives on the one hand and autonomy required by voluntary self-help organisations on the other.

7. Conclusions:

a. Co-operative development should interest every government because co-operatives are a worldwide known and tested form of mobilising people and their resources for their own development.

b. When co-operators help themselves by pooling their resources and working together for their own benefit, they create wealth, employment, knowledge and a sense of solidarity and thereby, indirectly, contributing to the development of the country as a whole. Therefore, co-operatives should be officially recognised as desirable and useful organisations having their own distinct character.

c. As locally rooted organisations, directed by democratically elected leaders, co-operatives can become a nucleus of local development in favour of both the poor and the better off. Trust in elected leaders and member/user control is an asset, giving co-operatives an edge over commercial business.

d. An appropriate legal framework can help to elect competent and trustworthy leaders and to hold them accountable. Provision of regular audit by specially trained auditors can enhance transparency and restrict corruption in co-operatives.

e. Co-operative law has to define the boundaries within which co-operatives can work according to their own rules, principles and by-laws, allowing what is beneficial and prohibiting what is detrimental or potentially dangerous.

f. Where government’s co-operative development policy and co-operative laws are made in a participatory process and reviewed from time to time in partnership with the elected representatives of the co-operative movement, the chances of creating an conducive environment for co-operative development are good.

g. Strong and vibrant co-operatives can compliment the efforts of governments in the development of a nation by actively contributing in drafting the public policy and regulating the advocacy work. Co-operative sector must build its capacity to influence legislation & public policy (protection of vulnerable section of the society by involving women & youth in co-op ventures / actions) through active participation in the dialogue with government and lobbying with concerned ministries.

h. Co-operative legislation must be in line with the ICIS and contain provisions on timely conduct of elections, maximum time limit for super session of a managing committee, independent and professional audit, uniform tenure of managing committee, regular and timely conduct of general body meetings, right of a member for access to information, compulsory system of filing returns and provisions for offences and penalties.

i. Acculturation and training programmes for co-operators should be geared towards inculcation of entrepreneurial values as well as best practices in management, finance and governance. This will encourage co-operatives to be more business like, efficient and strategic in identifying new value additive features for the benefits of their members.

j. Co-operation among co-operatives should be enhanced, especially through vertical integration with absolute role clarity so as to improve the bargaining power and flexibility of the co-operatives to operate globally.

k. The trade between co-operatives at domestic and international levels should be encouraged through e-trade, e-commerce, e-auction, e-network and also by organizing regular trade fairs, expositions, participation in international gala trade events and the governments must help co-ops to showcase their strength through policy support.

POINTERS IN SPEECH ON CO-OPS BY PM OF MALAYSIA

8TH ASIA PACIFIC CO-OPERATIVE MINISTERS CONFERENCE, KUALA LUMPUR, MALAYSIA

MR. IVANO BARBERINI
PRESIDENT,
INTERNATIONAL CO-OPERATIVE ALLIANCE

EXCELLENCIES

AND DISTINGUISHED GUESTS

LADIES AND GENTLEMEN.

I AM PLEASED TO BE ABLE TO JOIN YOU AT THIS CONFERENCE, WHICH MARKS THE FIRST TIME THAT MALAYSIA HAS BEEN GIVEN THE HONOUR OF HOSTING THE ASIA-PACIFIC CO-OPERATIVE MINISTERS’ CONFERENCE.

I WISH TO COMMEND THE MINISTRY OF ENTREPRENEUR AND CO-OPERATIVE DEVELOPMENT, THE VARIOUS GOVERNMENT AGENCIES, AND THE INTERNATIONAL CO-OPERATIVE ALLIANCE (I.C.A.) FOR SUCCESSFULLY ORGANISING THIS EVENT.

COOPERATIVES IN THE ASIA PACIFIC REGION PLAY A LEADING ROLE IN THEIR RESPECTIVE COUNTRIES. INDEED, ASIA-PACIFIC CO-OPERATIVES COMPRISE A MEMBERSHIP OF 530 MILLION PEOPLE, WHICH ACCOUNTS FOR 66 PERCENT OF THE TOTAL GLOBAL CO-OPERATIVES MEMBERSHIP.

THESE CO-OPERATIVES ARE INVOLVED IN VARIOUS ECONOMIC ACTIVITIES, INCLUDING AGRICULTURE, BANKING, CREDIT, HOUSING, TRANSPORT, HEALTHCARE AND MANY OTHERS. THESE IN TURN NOT ONLY PROVIDE OPPORTUNITIES FOR INCOME GENERATION THROUGH EMPLOYMENT AND BUSINESS, BUT ALSO REDUCE THE COST OF CONSUMPTION AND TRADE FOR MEMBERS. SUCH IS THE APPEAL OF THE CO-OPERATIVE CONCEPT THAT VARIOUS GOVERNMENTS HAVE ADOPTED CO-OPERATIVES AS IMPORTANT VEHICLES FOR SOCIO-ECONOMIC DEVELOPMENT.

IN MALAYSIA, WE HAVE LONG REGOGNISED THE ROLE OF CO-OPERATIVES IN THE NATIONAL DEVELOPMENT AGENDA.

IN MY VIEW, THE CO-OPERATIVE MOVEMENT HAS A LOT TO OFFER THE PEOPLE OF THE ASIA-PACIFIC REGION.

THE BASIC CO-OPERATIVE VALUES OF HONESTY, INTEGRITY AND TRUSTWORTHINESS, TRANSLATED INTO PRINCIPLES THAT EMPHASISE THE DISTINCT IDENTITY AND WAY OF DOING BUSINESS OF CO-OPERATIVES, SHOULD STAND OUT AS AN EXAMPLE FOR THE REST OF THE BUSINESS COMMUNITY.

I AM PLEASED TO NOTE THAT MOST GOVERNMENTS IN THIS REGION HAVE RECOGNISED THE IMPORTANCE OF CO-OPERATIVES, AND HAVE PROCEEDED TO CREATE APPROPRIATE POLICY AND LEGISLATIVE FRAMEWORKS FOR THE DEVELOPMENT OF THIS SECTOR.LADIES AND GENTLEMEN

THE THEME FOR THIS YEAR’S CONFERENCE, WHICH IS ENTITLED ‘FAIR GLOBALISATION THROUGH CO-OPERATIVES’, IS AN APPROPRIATE TOPIC TO BE DISCUSSED, AS IT ADDRESSES THE CURRENT ISSUE OF CONCERN TO MANY ASIA-PACIFIC COUNTRIES, PARTICULARLY THE DEVELOPING NATIONS.

THROUGHOUT THE LAST 20 YEARS, WE HAVE WITNESSED THE EMERGENCE OF GLOBALISATION AS AN IMPORTANT PHENOMENON THAT HAS AFFECTED THE LIVES OF ALMOST ALL THE PEOPLES OF THIS REGION.

SUCH EFFECTS OF GLOBALISATION HAVE BEEN EXTENSIVELY DOCUMENTED. THE ISSUE THAT STANDS BEFORE THE CO-OPERATIVE MOVEMENT AND THE GOVERNMENTS OF THE REGION IS HOW WE ADDRESS THE POLITICAL, ECONOMIC AND SOCIAL IMPACT OF GLOBALISATION, IN OUR QUEST TO IMPROVE THE QUALITY OF LIFE OF OUR MEMBERS AND SOCIETY.

IT IS INTERESTING TO NOTE THAT ONE IMPORTANT ASPECT OF GLOBALISATION IS THE HIGH ECONOMIC GROWTH RATES ACHIEVED BY DEVELOPING ECONOMIES, WHICH HAS AVERAGED SOME 7 PERCENT PER ANNUM OVER THE LAST 25 YEARS. THIS HAS BEEN ACHIEVED LARGELY THROUGH BETTER INTEGRATION WITH THE GLOBAL ECONOMY, RESULTING IN A COUNTRY’S GROSS DOMESTIC PRODUCT (G.D.P.) INCREASINGLY BEING ASSOCIATED WITH EXPORTS AND IMPORTS, AND WITH A COUNTRY’S EXPORT SECTOR BECOMING AN INCREASINGLY CRITICAL GROWTH DRIVER.

MOREOVER, THE SYSTEMATIC REDUCTION OF BARRIERS TO TRADE AND INVESTMENT, AS WELL AS THE RAPIDLY FALLING COSTS OF TRANSPORTATION AND INFORMATION AND COMMUNICATIONS TECHNOLOGY (I.C.T.), HAVE ALL COMBINED TO RAISE THIS LEVEL OF INTEGRATION. IT IS THESE COMBINED EFFECTS THAT HAVE MADE THE GLOBAL ECONOMY AN INCREASINGLY IMPORTANT SOURCE OF GROWTH.

HENCE, IT IS MY WISH THAT CO-OPERATIVES TAKE FULL ADVANTAGE OF THE EFFECTS OF GLOBALISATION TO STRENGTHEN THEIR ROLE IN THE NATIONAL ECONOMY. FOR EXAMPLE, THOSE CO-OPERATIVES THAT POSSESS THE RESOURCES AND CAPACITY, SHOULD SEEK TO INCREASE THEIR INCOMES BY PARTICIPATING IN THE EXPORT SECTOR.

IN THIS REGARD, WE SHOULD COMMEND THE I.C.A. FOR SUCCESSFULLY ORGANISING THE INAUGURAL INTERNATIONAL CO-OPERATIVE TRADE FAIR IN TEHRAN LAST OCTOBER 2006.

THIS WAS THE FIRST STEP TOWARDS THE CREATION OF A GLOBAL CO-OPERATIVE TRADE NETWORK, AIMED AT BRINGING INCREASED BENEFITS TO ALL PARTIES. GOING FORWARD, I HOPE THAT MORE EFFORTS WILL BE UNDERTAKEN TO SUSTAIN THIS INITIATIVE.

MEANWHILE, THE HIGH GROWTH OF DEVELOPING ECONOMIES HAS ALSO RESULTED IN BETTER RESOURCE MOBILITY, WHICH IS REFLECTED IN THE MOVEMENT OF PEOPLE FROM RURAL AREAS TO NEW INDUSTRIAL CORRIDORS THAT HAVE SPRUNG UP IN THE URBAN CENTRES. THESE MIGRATIONS HAVE GENERALLY RESULTED IN INCREASED PRODUCTIVITY, AND IN AN OVERALL IMPROVEMENT IN THE STANDARD OF LIVING. HOWEVER, THERE IS ALSO A TENDENCY FOR INEQUALITY TO ARISE IN THESE CIRCUMSTANCES, WHICH CAN BE SOCIALLY AND POLITICALLY DISRUPTIVE.

WHILE THIS MAY BE MITIGATED BY GOVERNMENTAL EFFORTS TO PROVIDE BASIC SERVICES SUCH AS HEALTHCARE, EDUCATION AND ACCESS TO INFRASTRUCTURE, THIS TASK SHOULD NOT BE LEFT TO THE GOVERNMENTS ALONE. IN THIS REGARD, I BELIEVE THAT CO-OPERATIVES, TOO, CAN PLAY A ROLE IN MITIGATING THE GROWING INEQUALITIES THAT HAVE ARISEN.

AT THE NATIONAL LEVEL, CO-OPERATIVES CAN PLAY A ROLE BY IDENTIFYING SPECIFIC GROUPS THAT HAVE BEEN UNWITTINGLY LEFT OUT IN THE GROWING MOBILISATION OF RESOURCES FROM RURAL TO URBAN AREAS.

THUS, CO-OPERATIVES SHOULD BE FORMED AMONG GROUPS COMPRISING YOUTH, WOMEN, PENSIONERS, AND THE PHYSICALLY CHALLENGED, AMONG OTHERS. FOR RURAL AREAS SPECIFICALLY, CO-OPERATIVES CAN PLAY A VITAL ROLE BY INCREASING THEIR INVOLVEMENT IN THE AGRICULTURAL SECTOR; AND BY PLAYING A MORE MEANINGFUL ROLE IN LOCALISED DEVELOPMENT AS WELL AS IN POVERTY ERADICATION PROGRAMS. IN THIS WAY, CO-OPERATIVES ARE ABLE TO PLAY THEIR PART IN CREATING AND SUSTAINING GROWTH IN THE RURAL AREAS, THEREBY CONTRIBUTING TO THE INCREASED INCOME OF THE RURAL POPULATION.

NEVERTHELESS, CO-OPERATIVES WILL NEED TO OVERCOME SEVERAL WEAKNESSES IN ORDER TO PLAY THESE ROLES EFFECTIVELY. FIRSTLY, THERE IS A LACK OF UNIFORMITY IN THE DEVELOPMENT OF CO-OPERATIVES AMONG THE VARIOUS SUB-REGIONS AND COUNTRIES OF THE ASIA-PACIFIC REGION. THIS MEANS THAT THE APPROACH TOWARDS CO-OPERATIVE DEVELOPMENT CANNOT BE UNIFORMLY APPLIED ACROSS THE BOARD.

THUS, AT PRESENT, DIFFERENT COUNTRIES WILL NEED TO USE DIFFERENT APPROACHES TO ADDRESS THE NEEDS OF THEIR RESPECTIVE CO-OPERATIVE MOVEMENTS.

MOREOVER, ALTHOUGH SOME CO-OPERATIVES ARE GLOBAL IN THEIR REACH, THEY MANY NOT HAVE FULLY ADDRESSED THE EFFECTS OF GLOBALISATION THROUGH THE EFFECTIVE USE OF NETWORKING. THE CO-OPERATIVE MOVEMENT, BEING PEOPLE BASED, TENDS TO CONCENTRATE ON DOMESTIC ISSUES, AND THEREFORE FACES DIFFICULTY WHEN TRYING TO EXPAND ITS ACTIVITIES BEYOND NATIONAL BORDERS.


THIS RESULTS IN CO-OPERATIVES UNABLE TO GROW IN SIZE AND OPERATION TO TAKE ADVANTAGE OF ECONOMIES OF SCALE, WHICH CAN THEN BE TRANSLATED INTO PROVIDING BETTER SERVICES TO MEMBERS AND THE COMMUNITY AT LARGE. ULTIMATELY, A SIGNIFICANT NUMBER OF CO-OPERATIVES SUFFER FROM A SERIOUS LACK OF COMPETITIVE, RESILIENT AND SUSTAINABLE BUSINESS OPERATIONS.

THUS, CO-OPERATIVES MUST ADDRESS THESE CONCERNS BY UNDERTAKING SPECIFIC MEASURES THAT WILL ENSURE THEIR LONG TERM SURVIVAL AND RELEVANCE AS A SOCIO-ECONOMIC MOVEMENT. TO BEGIN WITH, CO-OPERATIVES MUST FIRST ENSURE THAT BASIC ADMINISTRATIVE REQUIREMENTS SUCH AS THE HOLDING OF GENERAL MEETINGS AND TIMELY AUDIT OF ACCOUNTS ARE ADHERED TO.

NEXT, THERE MUST BE A CLEAR SEPARATION BETWEEN THE ROLES OF THE BOARD, WHICH SHOULD CONCENTRATE ON POLICY, AND THE MANAGEMENT, WHICH SHOULD FOCUS ON RUNNING THE DAY TO DAY OPERATIONS OF THE ENTERPRISE. IN THIS REGARD, CO-OPERATIVES SHOULD SEEK THE INVOLVEMENT OF SKILLED MANAGERS IN THEIR BUSINESS, AND ENGAGE MORE PROFESSIONALS IN PLANNING AND IMPLEMENTING THEIR VARIOUS PROJECTS.

THE NEXT PHASE INVOLVES CO-OPERATIVES NETWORKING AMONG THEMSELVES TO LEVERAGE UPON AVAILABLE RESOURCES AND BECOMING MORE COST EFFICIENT. IN THIS WAY, CO-OPERATIVES WILL BE ADDING VALUE TO THE EXISTING CHAIN OF ACTIVITIES AS WELL AS BE ABLE TO IDENTIFY NEW VALUE CREATING ACTIVITIES. THIS CAN ONLY BE ACHIEVED IF CO-OPERATIVE LEADERS BECOME MORE ENTREPRENEURIAL IN PLANNING AND IMPLEMENTING THEIR STRATEGIES.

I WOULD LIKE TO POINT OUT THAT GOVERNMENTS ARE IMPORTANT STAKEHOLDERS, AND WILL CONTINUE TO PLAY A SIGNIFICANT ROLE IN THE SUPERVISION, REGULATION AS WELL AS DEVELOPMENT OF THE CO-OPERATIVE SECTOR. HENCE, SUCH A ROLE MUST BE CARRIED OUT CAREFULLY SO AS TO ENSURE THAT THE SECTOR’S OBJECTIVES ARE ACHIEVED IN THE BEST POSSIBLE MANNER, WITHOUT UNDUE STRESS ON THE CO-OPERATIVE MOVEMENT ITSELF.

IN MY VIEW, IT IS IMPERATIVE FOR GOVERNMENTS TO FORMULATE CLEAR AND SUPPORTIVE POLICY FRAMEWORKS FOR THE CO-OPERATIVE SECTOR, WHICH ARE FURTHER AUGMENTED BY A SOUND LEGISLATIVE FRAMEWORK FOR THE REGULATION AND SUPERVISION OF CO-OPERATIVES.

WITH THESE MECHANISMS IN PLACE, GOVERNMENTS WILL BE ABLE TO PROVIDE THE NECESSARY SUPPORT TO CO-OPERATIVES BY WAY OF:

• FIRSTLY, CREATING A CONDUCIVE ENVIRONMENT FOR THE HEALTHY DEVELOPMENT OF CO-OPERATIVES;

• SECONDLY, REMOVAL OF BARRIERS THAT MAY AFFECT CO-OPERATIVES;

• THIRDLY, PROVIDING RELEVANT SUPPORT MECHANISMS WHEN FORMULATING NATIONAL DEVELOPMENT PLANS FOR THE CO-OPERATIVE SECTOR;

• FOURTHLY, RESPECTING THE AUTONOMY AND INDEPENDENCE OF CO-OPERATIVES BY ALLOWING THEM TO BE RESPONSIBLE FOR THEIR OWN ACTIONS, INCLUDING PLANNING AND ACCOUNTABILITY OF BUSINESS RISKS; AND

• FIFTHLY, ABOVE ALL, ENSURING THAT THE AUTHORITIES FACILITATE AND NOT FRUSTRATE THE ASPIRATIONS OF CO-OPERATIVES IN ACHIEVING THEIR GOALS AND IN AIMING TO BE RESPONSIBLE PARTNERS IN NATIONAL DEVELOPMENT.

IN MALAYSIA, THE CO-OPERATIVE MOVEMENT HAS MADE SIGNIFICANT PROGRESS SINCE IT WAS FIRST INTRODUCED IN 1922. SOME OF THIS HAS BEEN DUE TO THE GOVERNMENT’S CONSISTENT SUPPORT FOR THE GROWTH AND DEVELOPMENT OF CO-OPERATIVES IN ALMOST EVERY ECONOMIC SPHERE.

THE NATIONAL CO-OPERATIVE POLICY (N.C.P.) INTRODUCED IN 2002 IS A "HOLISTIC" POLICY FRAMEWORK CRAFTED TO SUPPORT THE DEVELOPMENT OF THE CO-OPERATIVE SECTOR. THERE IS ALSO A COMPREHENSIVE LEGISLATIVE FRAMEWORK IN PLACE THROUGH THE ENACTMENT AND ENFORCEMENT OF THE CO-OPERATIVE SOCIETIES ACT 1993.

MOREOVER, THE MALAYSIA CO-OPERATIVE SOCIETIES COMMISSION (M.C.S.C.), WHICH WILL BE ESTABLISHED THIS YEAR, WILL PROVIDE THE NECESSARY FINANCIAL AND OPERATIONAL GUIDANCE TO THE CO-OPERATIVE SECTOR, WHILE HELPING TO ENHANCE THE EXISTING REGULATORY FRAMEWORK.

MY GOVERNMENT’S COMMITMENT TOWARDS THE DEVELOPMENT OF THE CO-OPERATIVE SECTOR IS ALSO REFLECTED IN TERMS OF THE INCREASED ALLOCATION UNDER THE NINTH MALAYSIA PLAN, WITH THE EMPHASIS ON DEVELOPING THE ENTREPRENEURIAL CAPABILITIES OF CO-OPERATIVES. THIS ENTAILS GREATER INVOLVEMENT OF CO-OPERATIVES IN TRADE, ESPECIALLY AT THE INTERNATIONAL LEVEL.

AS A TRADING NATION, MALAYSIA MUST ALWAYS SEEK TO BE RESILIENT AND COMPETITIVE IN THE GLOBAL ECONOMY, AND CO-OPERATIVES MUST BE GIVEN THE OPPORTUNITY TO PLAY THEIR PART IN REALISING THESE GOALS. AS SUCH, MY GOVERNMENT’S MEASURES ARE EXPECTED TO BRING CO-OPERATIVES CLOSER INTO THE MAINSTREAM OF NATIONAL ECONOMIC GROWTH.

WITH THESE MECHANISMS IN PLACE, IT IS MY HOPE AND EXPECTATION THAT THE CO-OPERATIVE SECTOR WILL RISE TO THE CHALLENGE AND BECOME A STRONG AND CAPABLE PARTNER, ALONGSIDE THE PUBLIC AND PRIVATE SECTORS, IN ACHIEVING THE NATIONAL OBJECTIVES SET OUT IN THE NATIONAL MISSION AND VISION 2020. LADIES AND GENTLEMEN.

LET ME STATE THAT MALAYSIA STRONGLY SUPPORTS THE ASIA-PACIFIC MINISTERS’ CONFERENCE, IN ENSURING THAT THE CO-OPERATIVE AGENDA IS AT THE FOREFRONT OF NATIONAL DEVELOPMENT IN THE VARIOUS COUNTRIES OF THE REGION. IT IS MY SINCERE HOPE THAT THIS CONFERENCE WILL HELP TO CHART A TIMELINE FOR MEMBER COUNTRIES TO REPORT, AT THE NEXT CONFERENCE, THE PROGRESS ACHIEVED IN IMPLEMENTING THE VARIOUS RESOLUTIONS ADOPTED HERE. IN THIS WAY, WE WILL BE ABLE TO TRACK THE COMMITMENT OF ALL PARTIES IN ENSURING THAT THE CO-OPERATIVE AGENDA CONTINUES TO BE GIVEN DUE RECOGNITION.

I ALSO EXPECT THE I.C.A. TO PLAY AN IMPORTANT ROLE IN ENSURING THAT THE CONFERENCE LEADS TO CONCRETE AND REALISTIC PROPOSALS AS WELL AS IN WORKABLE ACTION PLANS THAT CAN BE MONITORED BY ALL PARTICIPANTS.

AS SUCH, I WISH ALL DELEGATES A FRUITFUL AND PRODUCTIVE CONFERENCE HERE, AS WE MOVE TO CHART THE FUTURE OF ASIA PACIFIC COOPERATIVES TOGETHER. I BELIEVE THAT THE SUCCESS OF THIS CONFERENCE WILL BE REFLECTED IN MORE PROMINENT AND EFFECTIVE ROLES GIVEN TO CO-OPERATIVES IN THEIR RESPECTIVE COUNTRIES’ SOCIO-ECONOMIC DEVELOPMENT PROGRAMS IN THE YEARS TO COME.

. ON THAT NOTE, IT IS NOW MY HONOUR AND PRIVILEGE TO DECLARE THE EIGHTH ASIA-PACIFIC CO-OPERATIVE MINISTERS’ CONFERENCE, OPEN.

THANK YOU.

MALAYSIAN CO-OPERATIVES AND THE NEW LAWS

Several provisions in the Acts establishing the Malaysian Co-operative Commission and amending the Co-operative Societies Act 1993 are not in keeping with the percepts of the Federal Constitution

Koperasi Keretapi Berhad (“KKB”) - THE RAILWAY CO-OPERATIVE SOCIETY MALAYSIA -has on 2nd January 2008 filed a legal action at the High Court in Kuala Lumpur to challenge several of the provisions in the Malaysia Co-operative Commission Act 2007 and the Co-operative Societies (Amendment) Act 2007 which came into force on 1st January 2008.

KKB feels it is unreasonable for its capital, which has been built up over the years for the benefit of its members as a result of good management by the members of its Board, to now be taken away and used by the Government without adequate compensation.

The requirement for an outside body approving the members of the Board is also an unreasonable restriction on the rights of the members of KKB to manage KKB.

KKB has taken this step because we feel aggrieved by several of the provisions which unreasonably restrict the fundamental liberty of members of KKB to associate under Article 10 of the Federal Constitution

the fundamental liberty of KKB not to be deprived of its property for the use of the Government without adequate compensation in accordance with Article 13 of the Federal Constitution

the fundamental liberty of the officers of KKB not to be subjected to arbitrary arrest under Article 5 of the Federal Constitution

Koperasi Keretapi Berhad is one of the earliest co-operative societies established in Malaysia. In 1923, it was formed for the benefit of employees of Malayan Railways with the name “Railway Cooperative Thrift and Loan Society Limited” with only 98 members.

As at 31 December 2006, as a result of careful management by the management of the co-operative over the approximately 84 years of its life, the Co-operative has a subscription capital of RM4,342,257.99 and fixed and current assets amounting to RM4,674,199.73 and reserve capitals of RM1,092,000.00 whilst its current liabilities are only RM282,185.88.

The legal action filed by KKB asks for declarations that:-

Section 43 (1) of the Malaysian Cooperative Societies Commission Act 2007 (the Act) requiring that all cooperative societies shall deposit their funds not immediately needed for operations or investments into the Cooperative Deposit Account and Section 42(2) of the Act requiring cooperative societies to pay a percentage of its share capital, subscription capital and assets to the Central Liquidity Fund without providing for adequate compensation for the compulsory acquisition or use of the funds is inconsistent with Article 13 (2) of the Federal Constitution and is therefore invalid pursuant to Article 4 (1) of the Federal Constitution.

Section 42 (1) of the Malaysia Cooperative Societies Commission Act 2007 (the said Act) enabling the Malaysia Cooperative Societies Commission to require any cooperative society or any class, category or description of cooperative society by order in writing to contribute to the Central Liquidity Fund established under Section 42 of the said Act is money howsoever raised or received by the Federation and ought to be paid pursuant to Article 97 of the Federal Constitution to the Federal Consolidated Fund from which withdrawals are permitted in the manner stated in Article 104 of the Federal Constitution and the said Section 42 (1) of the said Act is therefore invalid under Article 4 (1) of the Federal Constitution for being inconsistent with the Federal Constitution.

Section 54 of the Malaysia Cooperative Societies Commission Act 2007 (the said Act) which provides that every offence punishable under the said Act, the Cooperative Societies Act 1993 or any other written law enforced by the Malaysia Cooperative Societies Commission shall be a seizable offence and that a police officer not below the rank of Inspector or an Investigating Officer may arrest on reasonable suspicion without being required to state the reasons for the arrest is inconsistent with to Article 5 (1) and (3) of the Federal Constitution which provides that no person shall be deprived of his life or personal liberty save in accordance with law and further requires that the person arrested shall be informed as soon as may be of the grounds of his arrest and shall be allowed to consult and be defended by a legal practitioner of his choice and the said Section 54 of the said Act is therefore invalid under Article 4 (1) of the Federal Constitution.

Section 43 (2) of the Cooperative Societies Act 1993 (as amended by the Cooperative Societies Amendment Act 2007)

which requires that a cooperative society shall, prior to the appointment or re-appointment of any person as a member of the Board of a cooperative society, seek verification from the Malaysia Cooperative Societies Commission on whether such person satisfies the fit and proper person criteria as may be specified by the Malaysia Cooperative Societies Commission is inconsistent with the citizens’ fundamental right of freedom of association guaranteed by Article 10 (1) of the Federal Constitution and not excepted by Article 10 (2), 10 (3) or 10 (4) of the Federal Constitution.

KKB has taken this legal action to safeguard the interests of our members and their savings.
We hope the Government will review their decision to enforce the Act or will take the necessary steps to repeal or amend the Act so it is consistent with the requirements of the Federal Constitution.

Dated 2nd January 2008

Che Hani bin Ismail

Secretary

Koperasi Keretapi Berhad