At its 103rd session, starting on 28 May, the International Labour Conference will be looking at how to facilitate the transition from the formal to the informal economy, with a view to elaborate a Recommendation. This will provide a good opportunity to explore the role of co-operative enterprises in formalising the informal economy.
In preparation for this discussion, an inter-departmental team from the International Labour Organization drafted a report that offers an overview of the phenomenon of the informal economy.
The report highlights a series of actions that could be taken to stimulate the transition from the informal to the formal economy, including developing co-operative enterprises.
Simel Esim, head of ILO’s co-operatives unit thinks that the adoption of such a labour standard could help bring to the forefront the critical role co-operatives play in facilitating transition to formal employment and enterprises from within the informal economy.
“For the Co-operative Movement it will be important to engage with the ILO constituents, namely the governments, workers’ and employers’ organisations two show the dual role co-operatives and mutuals perform in formalisation of the informal economy.
“Co-operatives of informal workers increase returns to their worker members through protection, promotion and participation. One important added benefit of the co-operative and mutual model compared to other models of enterprises is that they attend to issues of democratic, membership based decision-making, collective voice and concern for community. Moreover, joint service co-operatives of the self-employed and microenterprises can help them reach economies of scale, access markets and secure financing”, she said.
Co-operators will be represented at the International Labour Conference by Bruno Roelants, secretary general of CICOPA, the International Organisation of Industrial, Artisanal and Service Producers’ Cooperatives.
Membership based organisations of informal economy workers, like StreetNet International, HomeNet and International Domestic Workers’ Network will also participate in the conference. StreetNet, an alliance of street vendors is working with WIEGO (Women in Informal Employment: Globalising & Organising) to prepare their members for the discussion on the informal economy at the upcoming International Labour Conference.
Pat Horn, the international coordinator of StreetNet International, says: “Co-operatives are an important part of the Social & Solidarity Economy (or Popular Economy) which StreetNet envisions as the political economy that we are striving to build.
“We believe workers in the informal economy need to be organised in order to exercise their collective voice. However, worker co-operatives are something different, as they are a collective way of producing or delivering services. Not all membership-based organisations will decide to establish co-operatives – but certainly that is one of the things they could decide to do. It is not a linear process but two separate processes which may or may not be linked”.
WIEGO is an action policy research network that focuses on the economic empowerment of the working poor, especially women in the informal economy has carried out a number of projects with co-operatives.
WIEGO’s research has also showed that membership-based organisations (MBO) such as co-operatives leverage significant financial resources for their members. A survey they carried out revealed that 92% of MBO members said membership led to higher earnings.
