“Unless co-operatives resist and fight for appropriate recognition and treatment they risk losing their distinctiveness and commercial advantages” (The Blueprint for a Co-operative Decade, p. 26)
Co-operatives are operating in a world designed for profit-oriented, shareholder-owned businesses. They are often viewed as a marginal form of enterprise and few understand precisely how they work or the benefits they can deliver. This lack of understanding has led to most countries having a legislative framework which, far from facilitating co-operative development, actually acts as a barrier to growth. Against this backdrop, it is important for co-operatives to resist the tendency to mimic investor-owned enterprises, which can often be the easier option when operating within current financial, legal and regulatory infrastructures.
There has been some recent support from international institutions such as the United Nations which, in 2001, adopted a Resolution (56/114) urging governments (among other bodies) to encourage and facilitate the establishment of co-operatives, and to take appropriate measures to create a supportive and enabling environment for their development. Indeed, even more recently, the European Parliament voted to include an amendment to the Entrepreneurship 2020 Action Plan, so that measures to promote entrepreneurship would also apply to co-operatives. Although progress might seem piecemeal, it is slowly gathering pace.
Co-operatives often face a very poor enabling environment. This can be either due to restrictive laws or sometimes even the complete absence of a co-operative legal framework. To function well, co-operatives need prudential regulation which protects democratic member control and ownership, autonomy, as well as voluntary and open membership.
Furthermore, co-operatives require access to specific funding programmes which respect the fact that the share capital is owned and democratically controlled by their members.