The Irish Co-operative Organisation Society (ICOS) has welcomed legislation published by Minister Richard Bruton aimed at reducing red tape on co-operatives.
The amendments in the area of industrial and provident societies are aimed at easing the regulatory burden on co-operative societies and making examinership, currently available only to companies, accessible to co-operative societies for the first time ever.
ICOS represents co-operatives and organisations in Ireland – including the Irish dairy processing co-operatives and livestock marts – whose associated businesses have a combined turnover in the region of €13bn, with some 150,000 individual members, employing 12,000 people in Ireland, and a further 24,000 people overseas. In total, there are some 1,000 co-ops in Ireland and the largest 100 organisations employ approximately 40,000 people
ICOS President Bertie O’Leary said Minister Bruton is to be commended for beginning the process of review and modernisation of the Industrial and Provident Societies Act.
“The Bill, though modest in its ambition, is a welcome start to the long overdue process of ensuring that groups and communities have a choice as to the corporate model they wish to operate under. The co-operative model provides a corporate option which promotes a set of principles and values that are unique and different from those of a company,” he said.
He welcomed in particular the provision in the Bill providing societies with access to examinership, an omission from the original examinership measures which ICOS had lobbied to be corrected.
“The measures being taken in this Bill will in part ease some administrative and regulatory burdens on co-operatives, in particular in respect of the current requirement to complete a Triennial Return and will also widen the scope for co-operative societies to choose the accounting year end most suited to their business requirements.”
Further updating and modernising of the now 120-year-old Industrial and Provident Societies Act is an essential exercise that will contribute to Irish economic progress, the ICOS President, Bertie O’Leary added.
“These legislative and policy changes will help to ensure that the co-operative business model benefits from the same opportunities and privileges currently available to investor owned companies under company law.
“In regard to future legislative changes, Mr O’Leary noted co-operatives in Ireland currently function under legislation where there is no statutory definition of what constitutes a co-operative. Members are also subject to statutory financial limits in regard to how much shareholding they may invest in their co-operative. Smaller co-operatives also cannot avail of audit exemption provisions available to certain companies and they cannot currently avail of existing examinership provisions.
“The role of the co-operative movement in Ireland is limited in comparison to that in other countries and there is a striking disparity between Ireland and other countries in the sectors where co-operative businesses have flourished. This needs to be addressed to facilitate the future growth and development of modern day co-operative businesses.
“We will closely examine the proposed legislation and it is to be hoped that the progress of the Bill and any related amendments will bring a spotlight to bear on the many other aspects of co-operative legislation in need of modernisation,” he concluded.