THE NEW CO-OPERATIVE SOCIETIES ACT

In each of the last four decades, a new Law has been passed to govern Co-operatives in Tanzania. In 1968, in response to problems caused primarily by too rapid growth, the 1932 legislation was replaced by an Act which greatly strengthened the power of the government to intervene in Cooperative affairs. In 1975, the mould-breaking Villages and Ujamaa Villages Act made each village into a single corporation responsible both for the administrative functions of local government and the commercial functions hitherto carried out by Co-operatives. Everybody in the village was automatically a member. The Rural Primary Co-operatives ceased to exist and, shortly afterwards, the District and Regional Co-operative Unions were also abolished. The 1982 Act, which was discussed in the January 1986 Bullet of Tanzanian Affairs, brought Tanzania more than half-way back to Co-operative orthodoxy. Now the 1991 Co-operative Societies Act has completed the process.

Whether the 1991 Act represents final recantation of valuable Socialist principles or the welcome return of the Prodigal Son to the Cooperative father it is an outstandingly well-written piece of legislation. In its’ way, it is as radical as the 1975 Act. Many third world countries talk about the need for legislation which gives proper autonomy to Co-operatives. Tanzania. has led the way by producing such a Law. Many of the good features of the 1982 Act are retained in the 1991 Act. However, it is the changes which are of great interest.

At the root of it all is one word in the 1991 definition, “A Cooperative Society is an association of persons who have VOLUNTARILY joined together…”. The omission of the underlined word in the 1982 definition was meant to preserve the 1975 idea that everyone in the Village was automatically a member. The 1991 Act not only restates the time-honoured Co-operative Principle of voluntary membership. Its’ details are also consistent with all the Six Principles supported by the International Co-operative Alliance.

The 1982 statement that Co-operatives act in accordance with a ‘Socialist outlook” is gone. So is the rule that all Co-operative activity in a village should be under the umbrella of one multi-purpose Co-operative and of a Co-operative Development Committee. There is practical support for small group enterprise since groups with specialized skills are allowed to register with as few as four members.

Whereas the 1982 Act required the Registrar to “exercise control” over Co-operative Societies, the new requirement is to “promote, inspect and advise”, and there is a new emphasis on the duty of providing educational support. Although the Audit Commission is preserved, Societies now have the option of choosing “any competent and registered auditor appointed by the general meeting and approved by the Registrar”.

No longer can the Registrar order Societies to amalgamate or to divide or to join a federal body. In all such matters, the Registrar has a duty to advise and, in one case, there is the sanction that members can become personally liable for debts caused by not following the Registrar’s advice,

Only Societies which are receiving financial assistance from the Government can be forced to accept government nominees on their board and the power to direct Co-operatives to sack an incompetent or dishonest manager is shifted from the Registrar to an Apex Co-operative,

The word “Apex Co-operative” has e different meaning from before, No longer does the Act DICTATE a three-tier federal structure with one Appex. Now a four-tier structure is suggested subject to the consent of members. The proposal is for a single national federation with sectoral apexes in membership. All reflections of the National Apex as a party organ parallel with youth wing and the women’s organisation (UWT) are gone.

The 1982 Act ALLOWED the Registrar gradually to delegate certain duties to the APEX ORGANISATION as soon as the Apex was judged to be competent. The 1991 Act DIRECTS the Registrar to delegate to “THE COOPERATIVES ON MUTUAL AGREEMENT”, The direction would have more force if it was accompanied by a time limit but the dropping of the judgement of competence seems important. It may represent the abandonment of a recipe for perpetual paternalism. Few paternalists abandon power if they have been directed to wait till their proteges are competent.

It is a pity that all pronouns in the new Act are still masculine. A change, especially in references to qualifications of membership, would have given a small push in right direction. Too many Co-operatives are hampered by the fact that the women who do most of the farming are not members unless they are “heads of households”,

Finally, let us hope that the full potential of this liberating legislation will be realised. The “Registered Villages and Ujamaa Villages” failed so far as they did not bring prosperity to the people. Meanwhile in the African countries, Co-operatives closer to the orthodox Western pattern were failing equally badly. The poorest third of the population need other structures if they are ever to pull themselves out of poverty. The problems have not gone away and the search for solutions as radical as those associated with Ujamaa should still be on.

The new Act permits members to shape their own Co-operatives and is also calls for additional Co-operative education. Let us hope that the educators put before the members ideas associated with Socialism and Ujamaa as well as those associated with Free Market and Competition, Unless people are encouraged to look at ideas from both sources, the chances that they will create Co-operatives that meet their needs will be unnecessarily reduced

A pessimistic interpreter can see the new Act as a jump backwards from Socialistic modes of Co-operation which did not help the poorest to older styles which did not help them either. Alternatively, it can be seen as a commitment to trust the people to choose their own modes of Co-operation, anywhere on the spectrum between Marx and Adam Smith. Let us hope the second will prove closer to the truth.
Peter Yeo

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