C. Types of co-operative organization

1. Terminology

The term "co-operative" is frequently used to describe a wide range of institutional arrangements for collective non-profit housing which are also described as, for example, collective self-help, mutual assistance, social housing and housing associations, to name but a few.

They are all attempts to describe ways in which individuals come together collectively to improve their housing on a non-profit basis. This publication uses the term "co-operative" to refer to all these variations which share a broadly common approach to housing provision but which are shaped by their own economic, cultural and political contexts.

The International Labour Organisation (ILO), in its Recommendation 127, defines a cooperative as "an association of persons, usually of limited means, who have voluntarily joined together to achieve a common economic end through the formation of a democratically controlled business organization, making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertaking".

Most housing co-operatives are not "business" organizations in the strict sense and have a strong social element but the definition does cover the basic principles of democracy and voluntarism and correctly emphasizes the economic element - they are more than a social club and need to be run in a business-like way.

This definition also excludes the legal element in which, in most countries, organizations using the name "co-operative" must be registered under a Co-operative Societies Act or similar legislation. This provision is intended to protect co-operatives and to provide a framework for their supervision. Co-operatives in most countries accept a basic set of principles which include voluntary open membership, democratic control, limited interest on share capital, equitable distribution of surpluses and promotion of education for its members.

The co-operative form of organization is well known and it is suggested that the principles underlying it are appreciated as they are intended to provide a sound basis for mutual self-help, even if a registered co-operative is not the chosen vehicle. Other types of organization vary and include informal groups, residents, and tenants' associations, groups promoted by NGOs and foundations, groups sponsored by political parties and so on. However, all must share similar organizational principles and will benefit from similar management techniques.

In this publication the term "primary co-operative" is used to describe co-operatives which have a membership of individuals or families, a typical grass-roots organization. A "secondary co-operative" which forms the next level in a hierarchy has a membership of primary co-operatives. It is usually called a federation or union.

2. What kind of co-operative?

It is not the intention here to recommend the legal form that a co-operative should take. That is a matter for potential co-operatives in each country when they have reviewed the situation in the light of their own objectives. The most appropriate form of co-operative will depend on local circumstances. Here an assessment can be made of the possible advantages and disadvantages of each type through the case studies.

For example, Cotton Printers Workers Co-operative Society in Zimbabwe and the Ethiopian co-operatives are registered co-operatives. They are relatively complex organizations and find that registration benefits them, providing protection as well as gaining access to resources, particularly in the Ethiopian case.

There are also a number of organizations which conform to the ILO definition but which are not registered co-operatives, for example, the building groups at José Isiais Gomez and the groups in Cebu City which are supported by the Pagtambayayong Foundation.

There are a number of reasons why groups do not register formally as co-operatives including: their structure and operations are too simple to justify registration; the cooperative law and the manner of its supervision is not suited to human settlements cooperatives (often being based on agricultural marketing); co-operatives in other sectors are seen as being heavily government controlled; and co- operatives in other sectors have failed and new co-operatives would not attract support.

For a relatively simple task, like assisting each other to build on individually-owned plots, informal groups may be sufficient. A community wishing to install a water supply to an "upgrading" area or to organize garbage collection may also find a co-operative too complex.

In contrast, if a group intends to purchase land and build, it will need the legal protection of a co-operative or something similar. There are examples of groups finding that a cooperative facilitated reaching their objectives when they have been threatened by eviction. They have formed co-operatives, mobilized savings and bought land, and so transformed individual weakness into collective power.

3. The economic, political and social context

It is clear from the case studies and many other experiences that the context within which co-operatives develop has a considerable influence on their success or failure and on the nature of these co- operatives.

Perhaps the most obvious parameters are placed by the political system in any particular country. Broadly speaking, political systems range along a continuum from socialist, centrally-planned economies to market economies. There are many variations along the continuum and special note should be made of the significant role played by the State even in economies which are market-orientated.

Co-operatives play an ambiguous role in many countries as they are formally nongovernmental but are frequently a major instrument of government policy in mobilization of citizens towards economic and social goals. In some instances groups do not register as cooperatives in order to maintain a relative autonomy from governmental supervision and control. This governmental influence can range from support in areas such as training and finance, to government officials to all intents an purposes running the co-operative movement.

Other factors which are not so obvious also play a role in many instances. Access to resources is determined by local political factors as well as by national politics. Again, in many countries, particularly in Africa, there are other determinants in the political and cultural process related to tribe, clan and extended family. Housing co-operatives must operate in a complex situation in most countries and these formal and informal parameters will be well known to local actors. Their existence is noted here so as not to over- simplify the analysis.