I have been at an event this week in Rochdale Town Hall to mark the work over 100 years of the Co-operative College.
Education has been a principle of co-operative action throughout and the combination has been an extraordinary accelerator over time for working class talent.
The second day of the conference has been focused on cooperative education around the world. I had the privilege of chairing a panel of five outstanding cooperative educators from five countries:
Dr Cilla Ross (UK)
Dr Sonja Novkovic (Canada)
Professor Esther Gicheru (Kenya)
Mr Noel D Raboy (Philippines)
Professor Mohamed M Maie (Somalia)
How are we to make sense of cooperative education around the world? I introduced the idea of co-operative education through a picture.
What pictures of cooperation would you choose? I’d be interested to learn.
Here is the one that I picked, one that I saw first hand in an exhibition at the National Gallery London in 2015.
This oil painting, The Sampling Officials or The Syndics, is one of Rembrandt’s group portraits – think also of the Night Watch and the Anatomy Lecture. It was painted in 1662, so it is one of his later works.
These are elected officials of the Drapers Guild. It is their job to check the quality of cloth produced through the guild.
For me, this is six portraits in one. But it is also one portrait, of a group in harmony.
There is tranquility in the picture, emerging from the composition Rembrandt has used. Look at the way that three horizontal lines suggest balance, the table through to the arm of the chair, the dominant level of their heads and the top of the panel on the wall.
There is colour and texture, light and shadow.
Equal importance is given to each person, the servant in the centre and the five officials. Each has a personality that comes through. Each is lit; as always with Rembrandt he uses light to tell us where to look.
The traditional interpretation of the painting is that the officials are on a platform before the assembly of the Drapers’ Guild and they are giving the assembly – us the viewer – an account of the year’s business. In short, it is a co-operative AGM.
The guilds can be thought of as mutual associations with members and typically a degree of internal democracy. In my book A Short History of Cooperation and Mutuality, free to download, I point out how these early forms of co-operation also underpin the art that we value today.
The word masterpiece – in origin – means a piece of work produced by a member who wanted to be rated as a master of their guild. The Dutch Masters were literally masters: painters who were organised into entrepreneurial guilds. The patron saint for artists was St Luke. But with church patronage in decline in the Low Countries, in Calvinist times, the Guilds of St Luke turned instead to domestic customers, developing an extraordinary market for art.
By the time that the Sampling Officials was painted, 45,000 paintings were estimated to hang on the walls of homes in Delft.
Rembrandt’s painting was commissioned by the Drapers Guild and hung behind this platform, in their guildhall for one hundred years. It is a projection of what the guild is, an act of co-operative education from the day it was hung for all who are part and who join. Through quiet co-operation, you can be immortal.
So, if you want to be immortal, I’d encourage you to explore and perhaps even to master the art of co-operative education.
On January 14th 2013 a horse-drawn carriage, with trumpeters following and snow flakes falling, carried the coffin of Keith Crombie, proprietor of the Pink Lane Jazz Cafe, on a final journey across the city of Newcastle. This was the death at the age of seventy four of a remarkable local character, known as The Jazz Man, but it also threatened to be the death of the city’s heart of jazz.
With permission from Crombie’s relatives, Dave Parker stood up with a small group of fellow jazz lovers, to ask whether the way to keep the legacy of the Jazz Man alive was to form a co-operative of those who wanted to see a jazz club survive. He promised to set up a Facebook page at the end of the wake and asked anyone who liked the idea to like the page. By the end of the weekend, five hundred people had added their name. The Jazz Co-op was born.
Keith Crombie was by all accounts curmudgeonly, eccentric and gifted. He had been involved in the North East jazz scene from the 1960s and around 1990 he started the Jazz Café, a small music venue in Newcastle’s West End which he ran until his death in 2012. He was picky about who came in. He once famously turned away the entire Newcastle FC squad. Actors and musicians though were welcome. The Shakespearian actor, Greg Hicks commented in a tribute at the funeral that:
The Jazz Cafe for me was a place where the world became better. Keith had the lock-in to a Noah’s ark of brilliant music, brilliant camaraderie and straight talk. He was one of the most uncompromising and authentic men I have ever met.
Within a few weeks, a co-operative was set up legally with broad objectives to support the performance and development of jazz, poetry, dance and related arts. During 2013 it established regular jazz nights at various venues in Newcastle while the old Jazz Cafe remained closed. It wasn’t plain sailing though.
“We had hoped to buy or lease the Jazz Cafe premises and we had several meetings with the owners, but that wasn’t possible,” said Dave Parker, who plays double bass himself and learned to play jazz at the Jazz Cafe. Jazz and co-operatives, he describes as his two great passions. “In the meantime we learned the hard way that it’s nearly impossible to make a jazz club financially sustainable. To make it viable you need to get income from bar sales.”
In 2014, after a year of hosting events across different venues, a suitable home came up for sale, The Globe, a pub which was being sold off or closed down by the pub company that owned it. Previous tenants had build up a following for music at the pub and in a non-residential area, it had a rare late night license.
The co-op needed the money to bid, and at this point in the story, Co-operatives UK stepped in, in partnership with Locality with support through a pioneering online platform, now commonplace, to make it easy for existing and new members to invest in ‘community shares’ – equity for co-ops.
Two thirds of what was needed for the sale and the refurbishment was raised from two hundred people – artists, activists and music lovers – with a bridging loan for the remainder coordinated by the specialist Co-operative and Community Finance.
On April 30th 2014, International Jazz Day, The Jazz Co-op was launched at its new permanent home. With an emphasis on inclusivity through the refurbishment, The Globe became one of the few small music venues in Tyneside to be fully accessible.
Over the last year, the Jazz Coop has put on 70 jazz gigs, including both local and visiting musicians, but to widen its revenue base and appeal, The Globe has also hosted over 200 other live music and dance events.
“We didn’t set out to own a pub. We set out to promote learning, playing and listening to of jazz, but in order to make that possible, we have to earn money. We decided early on that we would not ask for grants, because to do so would put us in competition with existing arts bodies and we value all that they do” says Dave Parker, now co-chair of the co-operative.
The links between jazz and co-operation are natural ones, says the great cooperative researcher Professor Johnston Birchall, himself a jazz guitarist.
You can be an individual and a team player. A good jazz musician can join a jazz band anywhere – a good co-operator can join a co-operative anywhere.
Both are about shared freedom. Just as a co-operative is a device in business to allow different people with different skills to come together as equals and create something new, jazz allows different musicians with different talents to play together within a consistent musical framework. For both, you have to listen to others in the band, to keep the whole in harmony and to help highlight the right themes at the right times.
The musical framework and freedom of jazz, Johnston Birchall tells me, is rooted in a rich theoretical language that is derived from a relatively simple set of rules. George Russell, a jazz pianist, set these down in a 1953 book, The Lydian Chromatic Concept of Tonal Organisation – drawing on his time playing with musicians such as Miles Davis and Dizzy Gillespie in New York at the time.
Both can be seen as complex evolving systems that:
are connected with enough flex and variety not to be too rigid or homogenous
can self organise with reference to some simple rules
can change over time, without the results being predetermined.
Russell’s work found expression in the best selling jazz record of all time, Kind of Blue, released in 1959 by Miles Davis. Before this, jazz was organised within the confines of harmonic progression, chords building towards a tonal resolution. In Russell’s new formula, the rhythm section sustain a harmony sequence, while soloists explore the melodies that each chord allows, improvising with more freedom.
For me, it is indeed reminiscent of the seven principles of co-operatives, which establish a framework of rules and values within which freedom to co-operate can be given diverse expression. As the saying goes, if you have seen one co-op, you have seen… one co-op.
For the two combined, any jazz lover is free to join the Jazz Co-op and invest in it as a member, and indeed my own membership application, after meeting members in Newcastle on Friday, is in the post.
Perhaps not surprisingly, part of the encouragement for the Jazz Co-op has come not just from fellow Newcastle co-ops such as Alpha, an outstanding communications co-op, but also from fellow music co-operatives. These include the Bell Inn in Bath, itself an extraordinary community success story, Hackney Co-operative Developments, which hosts the Vortex Club in London, and more recently the Sir Charles Napier in Blackburn.
Each of these in its own way offer examples of community buy-outs – a democratic variant on what is still common in the business world of ‘management buy-outs’. In Scotland, it has been land that has led the way, with a target to achieve one million acres in community ownership. In England, Wales and Northern Ireland, it has been community assets, including pubs.
The story of Keith Crombie lives on through the Jazz Co-op, but it has also been charted through a documentary directed by the film-maker Abi Lewis and supported in part through crowd-funding. The film won a best factual production award at the Royal Television Society Awards and an international film prize at the NorthWestFest in Canada.
As Dave Parker of the Jazz Co-op puts it “we can’t bring Keith back but we can continue the work he has done.”
Or as Keith Crombie himself put it when asked about jazz, freedom and his jazz cafe in the bustling heart of Newcastle,
I never worry what other people think. I just do what I do.
I have had the opportunity to hear the stories of people from a number of co-operative enterprises in Rwanda, host this year to the annual conference of the International Co-operative Alliance (ICA).
The country is rebuilding impressively over recent years, after the horrors of the war and genocide of 1994.
Every town has a Genocide Memorial, including one in the capital city Kigali, which I visited with an ICA delegation, to lay a wreath in remembrance.
The cooperative sector before 1994 had been weak, seen as a conduit for donors, but in the last decade, they have started to play a much wider role in the economy. In 2007, legislation was passed for co-operatives, and each sector of farming was organised into primary co-ops, federations and unions, offering a chance to bring cooperation into the entire value chain.
Today, the number of cooperative members is 3,816,591, representing over half of all the Rwanda adult population (55.3% of Rwanda). The number of co-operative enterprise has increased from 919 in 2005 to 8,995 in 2018.
This rebuilding of the co-operative sector has helped the country to reduce levels of poverty and inequality, Monique Nsantabaganwa, Deputy Governor, Rwanda Central Bank told ICA delegates on Thursday. “Taken together, the co-operative sector is nowRwanda’s biggest wealth creator” said the Business and Industry Minister, Soraya Hakuziyaremye.
Following an excellent three day conference, exploring the role of co-operatives in advancing the United Nations Sustainable Development Goals (which you can read more about via the reports of Co-op News) I had the chance to meet two transport co-operatives operating out of the capital city, Kigali.
One, Coctramavk, was formed in 2009 by 88 lorry drivers, each investing ten thousand Rwandan francs (around ten US dollars). One of the founders was Peter Kambanda and he showed me one of the seven trucks today that is jointly owned by the co-op, alongside the trucks (typically imported from Europe after they had been driven for around 300,000 kilometres) owned by the members themselves.
Peter Kambanda, co-founder of the Drivers’ Co-op
They compete for contracts to drive goods between Rwanda and around seven other countries in the region. Today they have ninety eight members, with good profits, shared as a dividend for each in 2018 of six hundred thousand Rwandan francs (around six hundred dollars). The co-op also offers medical insurance too for members and their families.
Medical insurance is also on the to do list for the second co-op I visited. Remera Transport Co-operative was formed by seventy cab drivers in November 2011, each contributing capital of one hundred thousand Rwandan francs. When a competition was run for the provision of public transport in the city, Remera won the contract for twenty one routes.
In 2014, therefore, the co-op borrowed money to finance the purchase of the first seven coasters (29 seater minibuses), with a further eleven in 2015. Today, it has paid off the loans and increased its capacity with 70 seater buses too. In concert with the regulator and other co-ops serving different routes, it has introduced tap and go payment technology, to make public transport cashless. The buses also operate free WiFi.
Remera Transport Co-operative
The co-op has won awards from the Rwanda Utilities Regulatory Authority for its services and has increased its members from 70 to 240.
Eric, member, Remera Transport Co-operative
In a blustering wind, with rains falling outside, Eric, a member of the co-op, described to me the key challenges as ones of access to capital, traffic jams and a lack of public awareness of the importance of co-operatives. “We overcome each of these challenges by working hard and being optimistic.”
The achievements he lists of the venture as: creating employment, reducing poverty and contributing to the national government through taxes.
Eric, for one, was proud of their contribution to taxation. He liked the idea of the Fair Tax Mark, pioneered by co-ops and social enterprise in the UK.
His words chimed for me with an event I saw being organised which was Taxpayers Appreciation Day and the song with which Peter and his fellow lorry drivers had welcomed us with – 🎵Who will build Rwanda? We will build Rwanda and we will do it by ourselves.
Self help? You can’t fake it, and you certainly can’t beat it.
I presented a motion today on the need for a new way of telling the story of co-operatives in our financial accounts. This is a proposal developed by a team of us around the world and I’m happy to say was approved unanimously.
It is not my usual blog post, but here below is the presentation I made at the 94-nation strong General Assembly of the International Cooperative Alliance, taking place in Rwanda.
It is hard to compare apples and oranges. That’s what I was told at school.
In French, you say it differently: don’t mix up cabbages and carrots. In Italian: don’t compare cabbages and potatoes
In Denmark, Susanne from Kooperationen who is seconding this motion tells me, it is apples and pears. In my home town of London, that means stairs.
In Russia, the saying is more subtle – that we should not confuse what is warm and what is soft
You may have a phrase in your own first language.
Well, co-operatives are apples, but financial accounting is designed for oranges… or potatoes.
Let me explain.
There has been a race towards global accounting standards in recent years, but with a single minded focus on shareholder firms and the needs of their investors.
The International Accounting Standards Committee (IASC) was established in 1973 to oversee the project of harmonising financial reporting globally. The project was, from the outset, concerned with companies whose shares are traded publically through stock exchanges, i.e. listed companies.
In 2001 the IASC was replaced by the International Accounting Standards Board (IASB). The IASB adopted the International Accounting Standards which had been issued by the IASC and developed them into International Financial Reporting Standards.
The IASB also started a project to develop a conceptual framework to underpin and give coherence to the work on issuing accounting standards. This conceptual framework explicitly states that the primary purpose of financial reporting is to give information to current and potential financial investors. The IASB sees the main users of financial reports as:
present and potential investors, lenders and other creditors, who use that information to make decisions about buying, selling or holding equity or debt instruments and providing or settling loans or other forms of credit.
The co-op sector, notably the European Association of Co-operative Banks and the UK Co-operative Performance Committee, has responded by looking to influence this agenda.
The resolution, which calls for appropriate accounting guidelines for cooperatives, recognises the work of two outstanding people and teams working on this.
First the Audit and Risk Committee of the International Cooperative Alliance and the work of Isabelle Ferrand.
Second, the Centre of Excellence in Accounting and Reporting for Co-operatives, at the University of St Mary’s in Canada, led by Professor Daphne Rixon.
One of the main problems co-operatives face when accounting under the for-profit format in the International Financial Reporting Standards is the classification of members’ equity.
Two challenges co-operatives face in the International Financial Reporting Standards, now or in future are around accounting for member capital and co-op dividend.
The first risks making co-ops appear far more fragile than they are, as member equity may be treated as a liability.
The second treats member dividends as an expense, i.e. a reduction in sales rather than a distribution of profit.
In many countries, co-ops are losing what tax advantages they might have, because their accounts don’t distinguish their cooperative difference.
While this is a technical and complex field, the resolution is a permission slip to explore the case for appropriate guidelines and a new framework for co-operatives (a Statement of Recommended Practice, or SORP) at the international level.
Others are doing the same. In July, a five year project was launched by the Ford Foundation and Open Society Foundation for a global Statement of Recommended Practice for non-profits. But that is more. about philanthropy and typically not right for us.
We need to be thinking five to ten years ahead.
It will take time and consultation to explore this further and any work will need to take into account the needs of co-operatives and mutuals across countries and in all their diversity.
It is helpful that an international working group of researcher and academics has been formed on cooperative accounting, following an international roundtable in London last year, hosted by St Mary’s so we can call on expert input.
Can I stress that most financial accounting, such as the valuation of assets, is perfectly appropriate. It is not wrong.
We need to focus on the specific areas of accounting where it is wrong for the member-owned model, where the co-operative model needs a different interpretation. It could be that we have common cause with a wider swathe of ‘for purpose’ business and social enterprise.
We need a financial vocabulary that allows us to express our performance as co-operatives. Otherwise it is like being asked to write poetry in a language that you do not speak.
We can’t progress if we are judged by shareholder value.
We can’t build a cooperative economy, if we don’t have a system of economics and accounting.
What we can do is what we have always been best at, which is to organise; and with ambition and organisation, we can over time win the battle of ideas.
Anita Bonds has spent her entire adult life as a grassroots organizer, activist and campaigner for social justice and it is down to the work of her and colleagues, and a particular form of housing co-operative, that the capital of the USA is becoming less divided and divisive than it has been over time.
In Washington for the first time myself, as a guest of the US co-op sector, I had the chance to hear of her work as a champion for housing co-ops.
As a student at the University of California at Berkeley, she became involved in the Free Speech Movement and returned home to support the struggle for underserved communities in Washington DC, a city long divided by economic and race injustice.
Since 2012, Anita Bonds has served as an At-Large Council Member on the Council of the District of Columbia and she chairs the Committee on Housing and Neighbourhood Revitalization.
“I have always had a concern about poverty in the District of Colombia. I remember being shocked hearing elderly people talking about how they couldn’t afford their prescriptions and they had to choose between food and medicine.”
The District of Colombia has a unique and important longstanding law, the Tenant Opportunity to Purchase Act, which gives tenants the right to purchase their residential building before any other buyer. As many are condominiums of apartments, tenants form ‘limited equity’ housing cooperatives.
Today, she explains in a talk at the Co-op Impact Conference in Washington, organised by the National Co-operative Business Association, that the district has around 4,400 units of co-operative housing in 99 properties. What they have been successful at is keeping low and moderate income residents in their communities, because rents are affordable, even where neighbourhoods are rapidly gentrifying.
Last year, she championed new legislation to promote housing co-ops, with recommendations to increase the number of limited equity co-op units by 40% by 2025.
“We should pay attention to the least of us. This is an expensive community and with different incomes and walks of life, as we like to call it. One part of the city has four percent of affordable units, but cross the river and it is ninety three per cent. Housing co-ops are a way of addressing this because they allow for a mix of people right across the city and they are a powerful way of keeping communities inclusive.”
The next challenge she sees are the rocketing rents faced by small businesses as neighbourhoods gentrify. Her tool for addressing that? As she sees it, this would be small business co-ops, to keep rents in the control of local people.
Many of our early folk stories and legends have the forest as a setting. Perhaps as a result, forests have always been at the heart of national identity.
One hundred years ago this month, the first UK Forestry Act created the Forestry Commission, with a mandate to boost forest cover in a nation that had slipped to around five per cent of its land with tree cover.
Finland has done it differently, perhaps because its own national story is bound up with co-operative enterprise. The country is the most forested in Europe, with 75% of the land area covered by trees. In contrast with the British tradition of large landowners, ownership is dispersed. Over half the forests are owned by families with ownership of over three hectares.
Following a Board meeting of Coops Europe, I had a chance to visit Metsä Co-operative at one of its woodland centres outside of Helsinki.
Metsä was formed in 1934, focused on sawmills and industrial uses for wood. Today, its members are 103,000 forest owners, covering half of the private forest land in the country. The members draw on the services of the co-op to manage and harvest wood in a sustainable way. The co-op has a turnover of €5.7bn and employs 9,300 staff.
The co-op can calculate the benefits for members by comparing what they would have received on the open market. Last year, members gained 7.3 euros extra for every cubic metre of timber sold.
As with any co-op, they have a voice in the running of the business too, electing a representative council of 52 members every four years and a supervisory board of 30 members.
And members can invest as well in the business. The interest on €74m of regular participation shares in 2018 was 7.5%, while for a second class of participation shares, open to wider investors, the interest rate was fixed at 2.5%.
The co-op is enjoying strong growth now, but only because of its response to a crisis earlier in the decade. From 2005 to 2012, there was a depression in the sector, with excess capacity in terms of paper mills. The business was indebted and an incoming CEO, Kari Jordan, was able to see how to turn the crisis into an opportunity. The co-op sold all of its production facilities in wood products that Jordan categorised as ‘sunset’ industries rather than ‘sunrise’ sectors.
Key to the future was to be sustainability. The co-op has always encouraged good forestry management, but now the emphasis was on this as a source of commercial advantage. The purpose of the business was agreed as “advancing a bioeconomy and circular economy by efficiently processing northern wood into first-class products.”
The idea of a bioeconomy as they see it is to replace a fossil fuel economy. So one of the major innovations they are investing in at present, is a €1.2bn pilot factory to produce textiles out of wood pulp. That is a new market opportunity, but it is also a replacement for cotton, which is notoriously water thirsty and fossil fuel hungry.
The circular economy takes a systematic view of the resources that they use, with careful management of carbon through forestry management and locking carbon storage in to high quality wood products, such as engineered wood for construction. 100% of the wood is traceable back to where it came from. 88% of the wood that the co-op uses is now certified by one of the major schemes, PEFC or FSC, compared to 10% of forests worldwide.
This include a focus on the use of every part of a tree, from wood left on the ground to encourage biodiversity through to timber and then the top most branches used for renewable energy. The co-op produces 15% of renewable energy in Finland, but their preference over time is to find new products and uses to store carbon rather than see it released as energy. At present 94% of all wood materials are used. By 2030, the aim is to get this to 100%.
The forest that I visited was mixed, with spruce and birch and pine, rich with life. Where trees has been felled, new seedlings were planted (some of the thirty million planted annually) as the eighty year cycle of forest regeneration started again. Tree cover in Finland is stable and grown for the long term and it is land that remains wild for those who need it, such as the vulnerable white-backed woodpecker, the numbers of whom are on the rise.
Carole Rich was given her first garden gnome when the housing co-op that she formed with her neighbours opened, thirty six years ago. “They thought I was crazy so it was a gift for crazy woman” she says.
At the time, the street was being demolished and it had taken four long years to get home, this time in new houses formed as Hesketh Street Housing Co-op. Those years had taken every ounce of determination and charm that Carole possessed, visiting slate factories, brick makers, furniture stalls, to keep people together, to keep their belief and to get the new development going.
Today, Carole is on the board not just of the co-op but also of North West Housing Services, which is a vibrant secondary co-op, registered in recent years with input from and now a member of Co-operatives UK.
North West support thirty four housing co-ops across Merseyside. On my visit today to the team, in the run up to Communities Week 2019, I met Carole and visited Lodge Lane East, a second co-op which is taking on a new property to create space for people with disabilities.
Ian, the Treasurer of the co-op, told me the story of the new building they were putting up on derelict ground. The land had been fenced off, with rubbish thrown over and when local people, members of the co-op, looked at the ownership, they found that it had been taken off a convicted criminal via a compulsory purchase order. The city authority owned it, but they didn’t know it.
The co-op, with over two hundred homes and clean finances, having paid off the last of its debts to NatWest Bank, offered to buy it at a discount to put up flats that would be an affordable alternative to the rogue landlords and high rents of the area, itself a short distance from where the controversial £1 Houses: Britain’s cheapest street was filmed.
“As a co-op, we are trying to raise the area, while others are trying to bring it down. We have houses with soiled nappies in the entrance, the remnants of a pig slaughtered in the yards, a brothel now closed down. Private landlords operate with immunity, one responding to damp by ripping out the skirting board and leaving a hole. The authorities should be cracking down on all this, but as a community, we have to fight back ourselves.”
Finance for the development came in part from loans from the other housing co-ops through North West Housing (North West has also invested money in recent community shares issues by other co-ops, including Leeds Community Homes and renewable energy co-ops in Liverpool and Drumlin, Northern Ireland).
With the new building weeks from being completed, the Lodge Lane East co-op members have gained confidence. The works manager told me that they have had no trouble, no threats while they have been there.
“We get a lot of respect. And we have a taste for it now” says Ian.
For Carole, her local area has already begun to come up in the world. A working class area with housing for servants has gone up market, with bohemian cafes and shops on nearby Lark Lane.
The housing co-op means that local people keep a stake in the area, forming a backbone of the community that helps to give it its colour and life. A one up, one down house next to the co-op area sells for £190,000; crazy prices for the city.
For Carole, her collection of gnomes has grown along with her family, smiling out in front of her house and under the awning in her garden. Her grandchildren give her more as gifts.