Michael Moynihan (Cork North West, Fianna Fail) | Oireachtas source

Fianna Fáil welcomes the easing of the regulatory burden on co­operative societies through the elimination of some of the discrepancies under which the current regulatory system favours the company model. We also support making examinership, currently available only to companies, accessible to co­operative societies. The Irish word "meitheal" sums up the principles of the co-operative movement, namely, people working together for the betterment of their community. In an increasingly globalised world, there has never been a greater need for the principles of the co-operative movement to be applied in a practical manner, supporting local employment.

Fianna Fáil has concerns regarding the prohibition on the registration of new friendly societies. While the sector has gone into decline in recent times, many friendly societies provide a valuable service in niche areas. In contrast, the sector appears to be doing well in the UK, with more than 10,000 societies there under the control of the Financial Conduct Authority. Given the lack of competition within the domestic banking sector and the difficulties experienced within the industry in Ireland in recent times, it could offer a valuable alternative means of providing pensions, savings or co-operative banking to people in a cost-effective manner. Rather than closing off this form of enterprise, the Government should be examining how the sector can be assisted in meeting the needs of the modern economy.

As stated by the Minister of State, co-operatives are businesses owned and operated by and for their members. The distinguishing feature of a co-operative is that the members have an equal say in the running of the business and a share in the profits. The sheer breadth of the co-operative sector can be seen from the website of ICOS, the umbrella organisation for co-operatives in Ireland. ICOS serves more than 150,000 members and directly employs 12,000 people in Ireland. It has seven core sectors: multipurpose dairy co-ops; livestock sector co-ops; store, trade and wholesale co-ops; service-related co-ops; community-oriented, culture and leisure co-ops; food, fishing and beverage co-ops; and advisory and education-related co-ops.

Co-operative societies are an undervalued form of enterprise. Fianna Fáil welcomes the move to reduce the regulatory burden placed upon them and to make them a more attractive business form. There are numerous examples of successful co-operatives around the country allowing people to work together to create sustainable enterprises, particularly in the agricultural sphere. Since the establishment of the co-operatives in the agriculture sector, particularly the dairy sector and livestock marts throughout the country, they have been invaluable. Some of the smaller co-operatives that opted to remain on their own despite the challenges in the sector have been very competitive. Some of the small co-operatives in Cork, including North Cork Co-op, Bóthar Buí Co-op and Drinagh Co-op, have been paying the best prices to their primary producers, the farmers. The House will later resume its debate on the Irish beef industry. The model of the co-operative movement and the value it has created cannot be underestimated.

For a long time credit unions were viewed as friendly societies, which came within the remit of the former Department of Enterprise, Trade and Employment. However, owing to the financial issues that have arisen, they have moved into the mainstream financial area. There are also many co-operatives in the social housing area, made up of sheltered housing agencies coming together to form co-operatives in order to draw down funding. The modus operandiof these co-operatives has been second to none. In the UK, a number of co-operatives are being established in a raft of sectors. As I stated earlier, the small co-operatives have best served the primary producers, which is the purpose for which they were established. While some co-operatives are huge global enterprises, the primary function of the co-operative movement is to serve its shareholders and the people they represent.

On the extension of the examinership option to co-operatives, there was a significant reform of examinerships last year as part of the Companies Bill. Fianna Fáil supports the extension of the examinership option to co-operatives. For legislation to be successful, it must be endorsed by the relevant professions, accountancy and legal. Also, the Judiciary needs to be trained in the complexities of co-operative society restructurings. Solicitors, barristers, auditors and accountants should be required to post prices for their services, including hourly rates, on the relevant regulatory website. All professionals should be required to provide clients with meaningful cost estimates.

A number of concerns were raised in the Seanad about the prohibition on the registration of new friendly societies. It is true that there has been a significant decline in recent times in the number of friendly societies here. There are currently only 47 in existence, with only a limited number having been registered in the past ten years. However, many such societies provide a valuable service to their members. During the debate on the legislation in the Seanad, Senator Seán D. Barrett highlighted the case of the public service friendly society which provides access to low-cost illness protection, specified illness cover, travel insurance and help for members struggling with school costs. While the Government appears to be willing to close the book on the era of friendly societies, it is a very different situation in the UK, where more than 10,000 such societies are in existence, managing the savings and investments of 4.5 million people and total funds of £15 billion.

The decision not to allow any new registrations is a sign that the Government is willing to allow the sector to wither away. While the structure may have fallen out of favour in recent times, it would be better to examine whether it could be reformed and a new regulatory model put in place before consigning it to the annals of history. Given the lack of competition within the domestic banking sector and the difficulties experienced within the industry in Ireland in recent times, it could offer a valuable alternative means of providing pensions, savings or co-operative banking to people in a cost-effective manner.

The purpose of the Bill is to provide for various amendments to two bodies of legislation, the Friendly Societies Acts and the Industrial and Provident Societies Acts. The main amendment in the area of friendly societies provides for the closure of registration of new societies. It is vital that we re-examine this. Co-operatives throughout the country have done extraordinary work. We should always give tremendous credit to those who were members of the boards or committees of various co-operatives. Over recent years, committee members have become board members. When they were set up, contentious issues arose right across rural communities in this regard.

It would be remiss of me not to mention Mr. Liam Moynihan, who passed away this morning. He was a member of Kanturk Co-op Mart and a former member of Boherbue Co-op, one of the oldest dairy societies in the country. I pay tribute to him and all board members who served on co-operatives. Sometimes they were pilloried over what they did in their communities, but they always had the best interests of those communities and societies at heart. They always worked extremely hard with the management of their co-operatives to ensure the accounts and dividends were in order and that new businesses would be fought for. At times, they stood in the way of management that was perceived to be going in the wrong direction. Right across the country, we should always pay tribute to the board members, because they were operating on a voluntary basis. Until recent times, there were by and large untrained. I speak in particular of agricultural communities. They had very little training to be on boards but had their communities' best interests at heart. Some went on to be on national boards, such as that of the Irish Co-operative Organisation Society. All contributed enormously to their own communities. I ask the Government to try to reinvigorate the original spirit of the co-operatives in regard to housing and so forth. Those concerned have done invaluable service. In the United Kingdom, there are co-operatives pertaining to nearly every aspect of life, even in the funeral business.

I welcome the thrust of the Bill. The few points I am most concerned about are on friendly societies. I commend everybody who has worked in co-operatives since their inception in the late 19th century. The co-operatives were a breath of fresh air in communities that had few if any prospects. I am thankful for having had the opportunity to speak on the Bill.

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