Draft Cooperatives Bill needs to reflect proposals in Sessional Paper No 4 of 2020

SACCO
Fred Sitati, Co-operative Movement Consultant

The enactment of the Cooperative Societies Act, No 39 of 1966 was the outcome of the Sessional Paper No. 10 of 1965 on “African Socialism and its Application to Planning in Kenya”, while the subsequent enactment of the Cooperative Societies Act, No 12 of 1997 (Amendment 2004) was anchored on the Sessional Paper No. 6 of 1997 titled “Cooperatives In a Liberalised Economic Environment”

The 1966 Act served the sector effectively for 31 years while the current Cooperative Societies Act has been in force for the last 27 years and counting!

However, following the proclamation of the 2010 constitution that introduced devolution in the country’s governance infrastructure, it became necessary to amend or align the current Cooperative Societies Act to the said constitution.

Accordingly, the National Cooperative Policy, 2019 themed “Promoting Cooperatives for Socio-economic Transformation” was formulated to direct the process of amending the existing Cooperative laws.

The Policy subsequently transmuted into the Sessional Paper No 4 of 2020.

Against the foregoing background, I wish to now restrict my observations on the Preamble to the Cooperatives Bill, 2024 as per Kenya Gazette Supplement No.32 (National Assembly Bill No 7).

The said preamble has basically highlighted three distinct purposes or aims for which the Bill was drafted, namely;

– Establishment of the offices of the Commissioner for Cooperative Development as well as those of County directors of Cooperatives;

– Promotion, registration and regulation of cooperatives; and

– Creation of the Intergovernmental Cooperative Relations Forum.

Let me discuss each one of them separately.

Firstly, it is important to appreciate the meaning of “preamble” in legal parlance that simply means an introductory statement that states the “purpose, aims and justification” of an Act or a constitution.

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Put differently, it gives the reasons for or intent of the law.

That noted, it is commonly accepted worldwide that the functions of governments (in cooperatives affairs) should be restricted to only four namely; “legislation”, “registration”, “dissolution/liquidation” and “monitoring”

Further; according to guidelines from the Committee for Promotion and Advancement of Cooperatives (COPAC), an offshoot of the ICA, the main objective of cooperative law should be to “guarantee minimum Government involvement, maximum deregulation, maximum democratic participation and minimum government spending by translating the cooperative principles into a legally binding framework for the organisation of self-determined self-help”.

The above guidelines though not obligatory should guide member countries of ICA, including Kenya, in the process of enacting their domestic Cooperatives laws!

Therefore by highlighting the establishment of Government offices in the framing of the preamble to the Bill is tantamount to clawing back the gains made after the adoption of the Statement of Cooperative Identity in 1995 and the substantial reduction of State controls as contained in the Sessional Paper No. 6 of 1997 on “Cooperatives in a Liberalised Economic Environment”.

Regarding the requirement to have the holders of these public service offices belong to a professional body for Cooperatives, the following questions come to mind:

Is there a felt need for this condition?

Does it imply the past and current holders of those offices lack sufficient professionalism in discharging their mandates?

Under which law is the so-called, ‘professional body’ registered?

Does the field of Cooperatives meet the threshold in terms of common body of knowledge to register a professional body?

Secondly, the other listed functions including promotion, registration, regulation of cooperatives are core to the role of governments and this should be the overriding purpose or aim of the draft Bill.

Thirdly and lastly, the proposal to create the Intergovernmental Cooperative Relations Forum to be attended by county directors with only one ex-official member from the apex coop body is, according to me, completely out of order!

The key stakeholders in such a Forum should be coop movement players themselves!

Such a Forum is the replica of the defunct District Cooperative Development Committees (DCDCs) created via the Commissioner’s Circular in the late 90s. I personally served as pioneer Secretary to Thika District CDC!

Does such a Forum that is convened twice in a year deserve to have a Secretariat during these harsh economic times?

Additionally, I don’t think the name given to the Forum is appropriate.

By naming it “Intergovernmental Coop Relations Forum “is akin to customising the “Intergovernmental Technical Relations Committee (IGTRC) created under the Intergovernmental Relations Act (IRA) 2012 to harmonise national and county functions among various Ministries/ State Departments.

Cooperatives are not appendages of governments; they are private sector enterprises hence the role of Government should largely be facilitative!

In my view, the Forum should be re-named “Inter-county Cooperative Relations Forum to be attended by movement leadership from the 47 counties (besides the county directors) and co-chaired by the Commissioner and the CEO of the Apex body.

As much as possible, the Cooperatives Bill, 2024 should reflect the progressive proposals contained in the Sessional Paper No 4 of 2020.

By Fred Sitati

Sitati is consultant with the Cooperative Movement

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