Maurice Quinlivan (Limerick City, Sinn Fein) | Oireachtas source

I thank the Deputies from the Independents 4 Change group for introducing the Industrial and Provident Societies (Amendment) Bill 2018. Sinn Féin is very happy to lend our support to the Bill, as it is important legislation which will have a significant impact on the development of Ireland’s co-operative sector.

We welcome the amendment to reduce the number of members needed to establish a co-operative from seven to three. From a number of engagements we have held with stakeholders in the sector, we were continually told that this was a major barrier to the establishment of smaller co-ops.

Sinn Féin shares the view of the Deputies in the Independents 4 Change group that the development of our co-operative sector is vital to the development of a fairer economy. If we are serious about addressing inequality in our society, we must deal with the inequality of ownership in our economy. Co-operatives offer an alternative model of business which is focused on worker outcomes, worker well-being and community sustainability. They retain economic power at a local and regional level, and allow for community wealth building.

Sinn Féin is committed to developing our co-operative sector, particularly our worker co-operative sector. These are co-operatives in which the workers of the enterprise own at least 51% of the shares.

Across Europe, worker co-operatives have been found to be more productive, more resilient and to provide greater benefits to their workers, communities and society. Worker co-operative businesses are also more likely to pay the living wage, have lower pay differentials between the top and lowest earner, use fewer zero-hour contracts, and have shown exemplary degrees of corporate social responsibility and a strong commitment to sustainability.

Scotland is quickly becoming one of the world’s leading countries in the development of worker co-operatives. In 2005, the Scottish Government decided to establish Co-operative Development Scotland, a subsidiary of Scottish Enterprise, tasked with the responsibility of developing Scotland’s co-operative sector. In 2012, it made the decision to focus exclusively on the development of worker co-operatives and it has since seen a substantial threefold increase in the number of worker co-operatives. The Scottish Government chose to actively develop the sector through Co-operative Development Scotland, coupled with supportive legislation.

A quote from John Clark, chair of an employee-owned business and member of the steering group sums up the approach in Scotland as follows,

We have a choice: to be passive and allow the development of a support environment for EO companies [workers' co-ops] to happen without industry input, or to take a proactive approach and seek to actively influence how that environment evolves. We believe the proactive approach creates the prospect of making Scotland the best country in the world to establish and grow [workers' co-ops].

Scotland is now clearly reaping the rewards. Elsewhere in Europe, there are 800,000 workers in the Italian worker co-operative sector. As Deputy Broughan mentioned, Spain is home to the world’s largest worker co-operative, Mondragon, which has 80,000 workers and in 2015 had sales of €11 billion. The worker co-operative sector accounts for 13% of Sweden’s GDP, 16% of Switzerland’s, 21% of Finland’s, and 4% in France.

For many stakeholders, a key barrier to the development of a worker co-op sector has been an absence of state policy supportive of the sector, and even the existence of legislation which makes it more difficult to establish co-operatives, such as the Irish rule requiring seven members to establish a co-op. That is why in 2014, the French Government introduced the social co-operative law which specifically introduced legislation supportive of the worker co-operative sector. Italy has the Marcora and Basevi laws and Spain has its laws to assist worker co-ops.

Despite the many benefits of the worker co-operative model to workers and their communities, Ireland has yet to develop its own worker co-operative sector in any significant way. To date, the worker co-operative sector here can be described as undeniably small and arguably underdeveloped. This could be put down to two reasons, namely, a lack of legislation specific to worker co-operatives and an absence of Government support for would-be and existing co-operatives. This lack of co-operative development is particularly disappointing given that throughout Ireland’s history, agricultural and financial credit union co-ops have made a significant contribution to our society.

Sinn Féin wants to see the success of both of these co-operative sectors replicated in the development of our own worker co-operative sector. Similar to the Credit Union Act 1997, we should continue to progress legislation like this Bill in order to assist the sector with supportive legislation.

Sinn Féin will table an amendment to the Bill on Committee Stage to introduce a simple definition of a worker co-operative which could be inserted into the Industrial and Provident Societies Act in order to provide the sector with further support and protection.

In 1988, the Government attempted to develop the co-operative sector through the establishment of the co-operative development unit, CDU. This State body was devoted to the development of worker co-operatives and resulted in the growth of worker co-ops from 47 enterprises in 1991 to 73 in 1992, and again between 1996 and 1998 there was another spike from 66 to 82. Some argued that the unit would have been even more successful in developing the sector if it were not for the absence of a supportive legislative framework at the time. Disappointingly, however, Fianna Fáil in government closed down the CDU, ending all soft and hard support for the development of worker co-operatives. Since its closure, there has been no provider of support or information specific to worker co-ops, something which has been central to the development of the sector in Scotland, France, Italy and Spain.

In keeping with ILO recommendation 193 of 2002, Sinn Féin would like to see an environment in which co-operatives enjoy equal treatment with other types of enterprise. Governments should create an enabling environment and facilitate access to support services. Governments should provide policy and a legal environment conducive to the creation of worker co-operatives, provide grant support and develop partnerships with co-ops.

The success stories of Scotland, France, Italy and Spain all provide evidence that there is an alternative way to develop our economy. Sinn Féin wants a sustainable economy, not one driven by profit, but maintained by secure jobs and broad benefits shared by greater society. This is achievable through a co-operative economy. In order for this to happen, legislation such as this Bill is essential.

I again thank Deputy Clare Daly and her colleagues in Independents 4 Change for introducing the Bill, which Sinn Féin is very happy to support.

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