PRESS RELEASE
November 20, 2024
The issue of share voting concerning the proposed amendments to Republic Act 9520, known as the Philippine Cooperative Code, has been decisively addressed. The International Cooperative Alliance, through its Cooperative Law Committee, has unequivocally stated that share voting is incompatible with Cooperative Principle No. 2, which upholds Member Democratic Control.
It is imperative to highlight that the amendments proposed by the House of Representatives and the Senate is not in conformity with Cooperative Principle No. 2, as asserted by the Cooperative Chamber and CLIMBS. This situation calls for immediate attention and resolution to ensure adherence to the fundamental principles of democratic governance within cooperatives.
In a recent legal evaluation conducted by Mr. Hagen Henry, the Chairperson of the International Cooperative Alliance Cooperative Law Committee, he delves into important aspects of the Principles of Cooperatives, with a particular emphasis on the 2nd Principle—Democratic Member Control. Mr. Henry’s insights aim to clarify the significance of this principle in governing cooperative organizations and its implications for member engagement and participation.
To quote him “The second option, “SHARE VOTING”, is not in conformity with the 2nd ICA Principle as it does not attribute any democratic basic vote per member. The financial contributions may also be considered when attributing additional votes, but their exclusive consideration does not meet the requirement that “cooperatives at other levels are also organised in a democratic manner” (2nd ICA Principle).
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For two reasons the second proviso “PROVIDED, THAT AT LEAST ONE-THIRD (1/3) OF THE SEATS IN THE BOARD SHALL BE RESERVED FOR SMALL SHAREHOLDERS.” might also not change the assessment. Firstly, the voting rights are exercised in the general assembly, the organ empowered to give instructions to the board and, secondly, the term “small shareholders” is not defined, besides being an unusual term for cooperatives whose “members” may hold shares, but must not
be confused with shareholders of capital-centered enterprises. (ICA Legal Assessment on Voting rights of the members of the cooperative).
The universally accepted principles of cooperation particularly the second (2nd) which is Democratic Member Control states that:
(2) Democratic Member Control – Cooperatives are democratic organizations that are controlled by their members who actively participate in setting their policies and making decisions. Men and women serving as elected representatives, directors, or officers are accountable to the membership. In primary cooperatives, members have equal voting rights of one member, one vote. Cooperatives at other levels are organized in the same democratic manner.
From this legal assessment, it appears that Section 44 of HB 9673 and Section 45 of Senate Bill 2811 are contrary to Cooperative Principle No. 2.
The number of shares a member has must not give them more voting power. If this was the case, a few members with more shares would have more control and could potentially monopolize the cooperative.
The Coop Chamber, CLIMBS, NAFECCOP and the primary members in 16 regions believe in the importance of upholding and recognizing the Cooperative Identity as a core principle of our organization. This identity distinguishes us from traditional organizations and business entities, emphasizing our commitment to democratic governance, member participation, and community benefit.
As further explained by Mr. Henry, Cooperatives are people-centered, and not capital-centered.
It is essential for cooperatives to remain true to their foundational values and principles, ensuring that they do not transform into corporate entities driven solely by profit. By maintaining our cooperative structure, we preserve our unique mission of serving our members and the community, fostering a sense of shared ownership and responsibility. This is the real Coop Identity. The movement must actively advocate for the cooperative model and strive to reinforce the characteristics that set us apart so that we can continue to serve our members effectively and sustainably.
Thus, the one-member, one vote remains at other levels, i.e. Secondary and Tertiary Cooperatives.
Contact Person
Edwin A. Bustillos
Mobile No. 09178017309
Email add: coopchamber.ph@gmail.com
