French lessons – how the social and solidarity economy was won

I had the opportunity recently to meet up with colleagues from the co-operative sector in France and to hear more about the success it has had in advancing a bold programme for a ‘social and solidarity economy’.

In France, 23,000 co-operative enterprises employ more than a million people (4.5% of the labour force) and have 24.4 million members. Co-ops are dominant in a number of sectors, including agriculture and food (40% market share), retail banking (60%) and retail distribution (30%). They are spread throughout the country – whereas nine out of ten large companies are headquartered around Paris, four out of five (76%) of the largest co-ops are headquartered outside in the regions.

The leading co-operatives include: Nicolas Feuillatte, the third ranked champagne brand, selling nine million bottles a year; Agrial, whose ‘Florette’ brand represent the leading European ready-to-use salad products; Intersport, the leading international distributor of sporting goods; Leclerc, the largest distribution business; and Le Relais Scop, the leading textile collection and recycling enterprise.

The roots of co-operation in the country  are sometimes dated back to systems of collaboration between farmers – fruitiere (ripening) – which were essentially cheese-making societies, that started in Switzerland and spread from the fourteenth century. These started with the reciprocal provision of milk between neighbours and developed into mutual societies. If you had contributed more milk than others, the next round of cheese was yours to sell – a dairy economy of sorts, although clumsy enough to lead to some disputes in the courts.

Almost a year ago, a law was passed with the support of the sector, but widening out to a broader social economy too, which is the Social and Solidarity Economy Act, passed on 31st July 2014. 

The legislation is broad in scope, involving one of the most comprehensive drafting processses ever seen in the National Assembly. Every committee, save that of national defence, were consulted in the preparation of the Act, as were eleven departments of government. The Act, 98 articles spread over 9 sections, champions social purpose and ownership across the economy. 

The Act represents a careful update of the previous co-operative legislation dating back to 1947, bringing the definition of a co-op into line with the Statement of Identity of the International Co-operative Alliance. Alongside this are new flexibilities in co-operative form. A new model, a residents coop, is introduced for people who want to buy where they live, to co-manage it and live together. The buyout of companies to worker co-ops is made a good deal easier – and demutualisation harder. 

While co-ops that have a wider community purpose have been able to serve non-members, it has been cumbersome to win the rights to do that, needing special provisions in statutes. The Act creates a blanket provision for co-ops to do business with non-member third parties for up to 20% of their turnover. 

One of the most significant changes though is a new responsibility, which is the extension of the practice of a ‘co-operative audit’, currently used a number of coop models (including worker coops, agricultural coops, housing coops and coops of the self-employed), to all co-operatives. This is a rigorous process, involving an independent external auditor. The same requirement doesn’t hold under the Act for wider social economy enterprises, which are only required to follow more flexible guidelines for best practice.

The audit marks a subtle point of balance, between informing members on the value of their coop and giving a tool for national regulators. At one point in drafts the Government was both proposing cumbersome procedures for the audit and inserting a right for it to withdraw co-operative status from poor performers. This met wit strong opposition and was withdrawn – as Caroline Naett, my counterpart at Coop FR, put it “co-operatives are not co-operatives by ministerial approval. They are co-operatives because they adhere to co-operative principles written into the law.”

The provisions for the sister parts of the social and solidarity economy, which include mutuals, foundations, voluntary organisations and social enterprise represent a combination of specific needs, such as a focus on volunteering rights, a strengthening of member democracy in mutuals, recognition in law of complementary currencies, and a generic framework, which should make it easier to move between different organisational forms – the assets of a coop when wound up can be transferred to any social economy organisation, for example, while an NGO can be converted into a community interest co-operative.

Of course, having an Act doesn’t mean that there is a full policy framework for the social and solidarity economy. There is an inter departmental public office that has been created, but without extensive resources and the risk is that action stops rather than starts with the passing of the Act. 

Even so, with Spain and Quebec also passing new legislation on the social economy, it could be that France has, again, started a revolution that could spread worldwide.

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4 thoughts on “French lessons – how the social and solidarity economy was won

  1. Pingback: French lessons – how the social and solidarity economy was won - Business Council of Co-operatives and Mutuals : Business Council of Co-operatives and Mutuals

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