This is part of a series of think pieces by scholars and practitioners working on a broad range of issues within the field of Social and Solidarity Economy. The series is being published in conjunction with the UNRISD conference “Potential and Limits of Social and Solidarity Economy”. The conference took place on 6-8 May 2013 in collaboration with the International Labour Organization and the UN Non-Governmental Liaison Service.
To respond to the fragmented landscape of legal frameworks on Social and Solidarity Economy (SSE) a variety of countries have been taking initiatives to create overarching legal frameworks that apply to the whole sector. One field within the sector that is characterized by much confusion and that receives little attention is the political participation of non-state actors in recent legal developments concerning SSE. In other words: how do various legal frameworks take into account the policy participation of SSE organizations? In this think piece, I take a closer look at five recent legal initiatives in Spain (2011), Ecuador (2011), Greece (2011), Mexico (2012) and Portugal (2013) and can show that approaches differ in these countries. I ask whether this will affect several aspects:
- the autonomy and responsibility of SSE;
- the degree of transfer of competency from governmental bodies to the SSE sector;
- the composition of consultative bodies;
- the representation of, and recognition by, the SSE field of these participatory mechanisms.
is currently working as a researcher for the Cooperative Branch of the International Labour Organisation (ILO) in Geneva. He was previously employed by the Research Institute of Work and Society (HIVA) where he worked on non-state actor participation, international development cooperation, monitoring and evaluation, and social and solidarity economy.
Developing legal frameworks
The SSE sector incorporates a broad range of organizations and is covered by diverse legal frameworks. To respond to this fragmented landscape, a variety of countries have been taking initiatives to create overarching legal frameworks. SSE organizations like cooperatives, charities, foundations and mutual benefit associations often have their own legislation and legal forms. Recent innovative initiatives have been tackling this atomization through the development of an overall legal framework covering the whole sector. Legal innovations are also developing in response to the rapidly changing field of SSE, where existing frameworks do not correspond anymore to the reality of social economy organizations.
This is a promising development, shaping new legislation to better accompany SSE organizations. However, this is still an emerging field, characterized by gaps, atomization and divergence of:
- definitions of social and solidarity economy (in terms of autonomy, voluntary participation, economic sustainability, social relevance, democratic ownership and decision-making, and distribution of surpluses);
- fields of activity identified as belonging to SSE;
- existence and functions of governmental bodies that follow up SSE;
- approaches to monitoring and evaluation;
- financing mechanisms of governments; and
- existing legal forms.
One field that is characterized by much confusion and that receives little attention is the political dimension of SSE organizations. Stated differently: how do various legal frameworks make reference to the policy participation of SSE?
Civil society involvement
This non-state actor or civil society involvement is one of the main paradigms in both political theory (that is, the governance or policy network literature) and practice (for example the European Union, the World Bank or OECD development policies). It almost seems to be regarded as the panacea for everything that could possibly go wrong. As Edwards (2004, p.2) puts it: “
Today, civil society seems to be the ‘big idea’ on everyone’s lips”. This involvement is directed either toward shaping policies or their implementation. Legislation may intervene in the structuring and consolidation of SSE and can be used to set up mechanisms of representation, dialogue and funding. These are important dimensions that determine the effectiveness of participation, but also the dynamism and autonomy of the broader SSE field. The SSE sector is particularly interesting in this regard because of its strong emphasis on:
- internal democratic decision-making;
- putting social and collective aims before profits;
- possessing technical expertise through productive activities or service delivery; and
- proximity to stakeholder needs.
In this think piece, I take a closer look at five recent legal initiatives and how these make reference to the participation of SSE organizations: Spain (2011), Ecuador (2011), Greece (2011), Mexico (2012) and Portugal (2013).
Spanish SSE law
The Spanish Constitution of 1978 makes certain references, in general, and sometimes in more specific terms to SSE (Art. 1; 9; 34; 38; 40; 129). Since 1990, SSE in Spain has been receiving increasing attention from public institutions, for example with the creation of the National Institute for the Promotion of Social Economy (INFES). Since 1999, the Council for the Promotion of Social Economy has been the advisory and consultative body on activities related to SSE. The Spanish Social Economy law 5/2011 (Official State Journal, March 30, 2011) has its origins in a law proposed by the Spanish Confederation of Social Economy Enterprises (CEPES). Subsequently, the Ministry of Employment and Social Security commissioned the International Center of Research and Information on the Public, Social and Cooperative Economy (Ciriec-Spain) to develop a law proposal on SSE. This resulted in law 5/2011, which aims to provide an overarching legal framework on SSE.
The law clarifies government-SSE relations. It recognizes the right of association of SSE organisations to represent and defend their interests (Art. 7). The law goes a step further, however, and specifies the requirements for these aggregated organisations. For example, they have to include the majority of SSE organisations and represent a minimum of 25 per cent of all member companies or associated entities. The Spanish consultative body is the Council for the Promotion of Social Economy, which includes both public officials and representatives of SSE.
Portuguese SSE law
The Portuguese Social Economy Law 68/XII (13th of March 2013) is also a framework law, setting the general, fundamental legal framework on the issue. The first article of the law refers to the Portuguese Constitution, establishing the general basis for the law, as well as measures to incentivize the sector. The Constitution highlights mainly two principles: the principle of a plural economy or coexistence of various economic sectors (including the public, the private, and the cooperative and social) (Art. 82, 85); and the principle of positive discrimination of the cooperative and social sector (Art. 80, 85).
The law remains relatively general on government-SSE relations. It states that SSE organisations are represented in a so-called Economic and Social Council and other bodies having the competency to define strategies and public policies in support of SSE. Art. 10 does highlight the role of government in enhancing dialogue between public agencies and representatives of the SSE sector at national and EU levels, thereby promoting mutual understanding and dissemination of good practices. Other legislation, however, does clarify the relationship between the government and the field of SSE organisations. This is mainly through the establishment of the António Sérgio Cooperative for the SSE (CASES) and the National Council for the Social Economy (CNES). Decree-law 282/2009 authorized the establishment of CASES, the successor organization to INSCOOP (Instituto António Sérgio para o Sector Cooperativo). Its aim is to strengthen the SSE sector and expand cooperation with the state. This is an interesting experience, because significant public powers are exercised by an entity belonging to the cooperative and social sector. Its main competencies are similar to those of governments, for example:
- support the establishment and development of SSE organisations;
- promote and disseminate the principles and values of the SSE sector;
- act in a supervisory function.
Along the same lines, resolution 16/2010 approved the creation of the CNES. Whereas CASES encompasses only SSE actors, CNES is a mixed government-SSE body. It is a consultative body with similar competencies: voicing opinions on legal initiatives, conducting research and so on. The law also deals with the organization and representation of the SSE sector itself. It states that the SSE entities can freely organize and form associations, unions, federations or confederations that represent and defend their interests (Art. 7).
Ecuadorian SSE law
In Ecuador an overall, inclusive legal framework has been created on the issue of SSE, here in the form of the law on popular and solidarity economy and financing (official Register N° 444; 10 May 2011). This law is based on the 2008 Constitution, which makes various references to SSE. Art. 283 states that "the economic system is socially oriented and mutually supportive"; it recognizes the human being as a subject and an end; it tends towards a dynamic, balanced relationship among society, state and the market, in harmony with nature; and its objective is to ensure the production and reproduction of material and immaterial conditions that can bring about the good way of living ("buen vivir"). Furthermore, the constitution states that the economic system comprises a variety of public, private, mixed, popular and other organisations, including cooperatives and community associations (Art. 283).
The 2011 SSE Law deals first of all with the aggregation of SSE organisations, and then goes on to clarify its involvement in policy making. Art. 121 mentions the possibility of establishing aggregated economic or representative organisations at the local, provincial, regional or national level. These are understood broadly, including unions, networks, federations or confederations. One of their aims is to defend the rights of their affiliates against public and private institutions. The law also mentions the possible involvement of these aggregated organizations in specialized supervision activities (Art. 152). Participation, however is mainly dealt with through a consultative committee that in turn is accountable to an inter-institutional committee (Art. 143). The consultative committee is composed of representatives of municipalities, provinces, parishes and SSE organisations, distinguishing between the main SSE groupings: federations of popular economic units; federations of the communitarian, associative and cooperative sector; and the popular and solidarity financing sector (Art. 142). It is the national electoral committee that is responsible for guiding the election of this committee. Art. 143 clarifies the various functions of the committee, which are mainly informing, developing opinions and proposing recommendations. The information, opinions or recommendations from the consultative committee are however not binding for the inter-institutional committee.
Greek SSE law
In the Greek
case, law 4019/2011 on Social Economy and Social Entrepreneurship (Official Gazette A’216) is the first legislative act introducing the concept of SSE to Greece. Until now, the sector has only been addressed partially from the point of view of its various constituents (such as foundations, associations, cooperatives), without any formal regulation for the overall category of SSE. This law therefore aims to establish an overarching legal framework. Almost no reference is made to government-SSE relations. Only when referring to Public Social Reference Contracts (public procurement), the law mentions the possibility of consultation beween public and private sector bodies, universities, scientific institutes, organisations of vulnerable groups and disabled persons, unions or associations, and chambers of commerce (Art. 16).
Mexican SSE law
In Mexico, a framework law on SSE (Official Journal, May 23, 2012) has also been adopted. It is based on Art. 25 (§ 7) of the Mexican constitution, passed in 1983, which establishes the state’s mandate to regulate SSE in order to facilitate its organisation and expansion. The first attempt to present a law on SSE, entitled “Law to regulate Art. 25 of the Constitution, referring to SSE”, dates from 1998, but it did not pass the Senate. In the period 2006-2009, a new law proposal, called “The General Law on SSE, to regulate Art. 25 of the Constitution” was put forward. This time it did not pass the Chamber of Representatives. In the period 2009-2012, three law proposals on SSE were presented, resulting in the adoption of the SSE law of 2012.
The Mexican governmental body that follows up SSE includes a consultative committee that is mainly composed of public officials and representatives of the SSE sector that are directly elected by a National Congress of SSE organisations (Art. 16). The latter is understood as the most representative body of the sector and operates according to a set of established criteria in combination with its own internal regulations. The established criteria include representation of aggregated SSE organisations (secondary, tertiary and fourth-level), and elections through the governmental body on the basis of geo-economic regions. The function of the National Congress is to:
- promote the principles, values and objectives of the sector;
- promote integration;
- take position on issues that affect the SSE sector; and
- elect a National Council (Art. 21, 22, 23 and 24).
The Council in turn is designed to coordinate, discuss and present any matters of interest to the sector. It helps SSE organisations in their administrative dealings with public or private institutions and it provides capacity building, amongst other things. The law defines both the rights and obligations of the SSE sector. These encompass the right to access government funding, to formulate policy observations, receive capacity building and so forth. However, it also defines obligations on working funds and financial reserves, reporting, and the imposition of conventions or administrative sanctions.
This brief review points toward various elements that deserve more attention, discussion and further research.
The various framework laws outlined in this think piece do clarify the relationship between governments and SSE organisations. Often this involves similar competencies to those usually exercised by governments, such as promotion research capacity building and monitoring. Interestingly, however, in some countries, the competency is largely transferred from governmental bodies to the SSE sector. The degree of competency transfer differs from country to country, ranging from merely informing and issuing opinions to capacity to control or co-decide. In some cases their opinions are binding whereas in others they are not.
An important dimension is the composition of these consultative bodies. They can be predominantly governmental, mixed governmental-SSE or solely SSE.
Furthermore, the representation of these consultative bodies is key. Do they involve the main actors from the SSE sector; and is the body recognized by the field as representative? In one case, it is the national electoral committee which is responsible for the election and composition of the consultative body; in another it is a national congress of SSE organisations.
An additional element is that these framework laws not only deal with the relationship between governments and the field of SSE, but also with the organization and representation of the SSE sector itself. This can be interpreted as putting at risk one of the core values of the SSE: its autonomy. On the other hand, one can argue that responsibility goes two ways: whereas governments can improve the quality and legitimacy of policies through the involvement of SSE; the latter can also invest in improving expertise, representation and internal democracy.
Edwards, Michael. 2004. Civil Society. Polity Press, Cambridge.