The new Co-operatives Act - some recollections and a comment

Dr David Fabri`s article on the latest revision of the Co-operative Societies Act (The Sunday Times, April 14) brings to mind the first serious revision of the 1946 legislation enacted in Malta to regulate co-operatives.

That legislation was almost a word-for-word copy of what is known as the British-Indian Classical pattern which the British used to enact for their colonies. Their own legislation was quite different.

The 1978 Act was largely a revision, and it is unfortunate that this year we have again gone for a revised, perhaps even better, edition of a colonial law. It was the work of Professor Hans H. Munkner whom I met the first time in the summer of 1974 at Oxford, when attending a congress organised by the Plunkett Foundation for Co-operative Studies.

Soon after my return Minister Freddie Micallef and George Ford (FAO consultant to the Malta Government) asked me, separately, to suggest somebody who could advise Government on a revision of the Co-operative Ordinance of 1946.

Possibly, the highest authority on co-operatives at the time was Professor Davidovic, a Yugoslav who was living in Canada. He was also at the Oxford congress where we had an interesting discussion on the Malta scene. But Davidovic was 70 at the time.

I suggested Munkner, at the time Professor at Marburg University and a leading consultant on co-operative law the world over. Besides, he was highly experienced as adviser on the revision of legislation very similar to ours in several former British and French colonies. My suggestion was accepted and he was in Malta in the summer of 1975.

That year he produced a report on the situation of co-operatives in Malta. It is a pity that his report, in my view still very valid, was shelved for years on end. For some unknown reason, it was never published by the Maltese Labour government which even refused to have it translated into Maltese, printed and distributed free to all concerned at the expense of the German government which financed Munkner`s three visits to Malta.

In 1977 Munkner was invited to undertake the revision of the 1946 Ordinance.

At the time I was secretary of the Federation of Maltese Co-operatives and had several official meetings with him. But a lot of work was done early in the morning on his way to the Co-operatives` Office, at the premises of Klabb Kotba Maltin in Strait Street, Valletta, where we used to have informal discussions on the revision.

It was at these informal meetings that APEX and its role was first discussed in detail. The initial suggestion was that the federation could serve as the co-ordinating and development agency for the co-operative movement and also provide common services to its members. But the federation (now defunct) was still in its infancy and one could hardly expect to have it recognised by inclusion in the new legislation. It was therefore decided to go for APEX and this suggestion was included in the federation`s memorandum to Munkner.

It is worth recording that when Munkner arrived in 1977 to draft the new law, he asked Government to provide guidelines on the kind of legislation it had in mind.

As a liberal democrat he would have liked to throw away the British-Indian Classical pattern and go for a European type of legislation. This idea had also been mooted by the Federation of Maltese Co-operatives. Time was passing and when he was left without a reply he threatened to return to Germany unless he had a decision taken at Cabinet level.

Finally he got the reply to revise the existing ordinance, and he began his work in earnest.

In the meantime someone began having second thoughts regarding Munkner. In fact, co-operative people in international circles were wondering how a socialist government had been `lumped` with a liberal democrat. The message was passed on to Cosimo Montebello, chairman of the Co-operatives Board, who resisted the idea of Munkner being replaced.

I remember him fuming when he phoned to ask me whether I knew a certain Swede from the Swedish Co-operative Movement. I had visited the Swedish Co-ops in 1972 and had maintained some contact with people I had met. The name, which I cannot recall, did not ring a bell, and I told Montebello that much. We succeeded in retaining Munkner.

Following the enactment of the 1978 Co-operative Societies Act Munkner came back in 1980 to file a third report.

But there were people in and around the Co-operatives Board who did not take too well to Munkner. I was well aware of this and used to feed him with information. In June 1980 he wrote to me saying: "It was very interesting and useful to have your comments on the scene, all the more since I had to sit down and write the final version of my report under pressure of our own ministry without having received all I needed from my Maltese counterparts."

That 1980 report fell on deaf ears and never saw the light of day. When Dr Joe Cassar, Parliamentary Secretary in the 1987 Nationalist government, got to know of it, it took him some searching to lay his hands on it.

Munkner was, and still is, a forward-looking, pragmatic man as can be seen from the six points that encapsulate his thinking about modern co-operatives.

Faithful to the age-old co-operative ideals and principles, he firmly believes that individuals who place personal profit before profit-sharing do not have a place in a co-operative.

The importance of capital should never be under-estimated, even if this is not the main aim of a co-operative`s existence.

Co-operative members have to be ready to accept that a co-operative places more responsibilities on its members than those carried by an individual working on his own.

The education of members is a must. It enables them to understand gradually the practical aspects of the running and managing of their enterprise in accordance with their line of operation. This also helps them develop their own capabilities.

One should not limit the expansion of the co-operative movement by ideological or dogmatic considerations, especially when there are so many opportunities for expansion in the private sector.

Any programme meant to help the development of a co-operative should not be an artificial one. That means that the creation of artificial conditions to set up a co-operative are to be discouraged. This often leads to failures. Besides, any incentives given to co-operatives should be based on long-term programming.

Wise words from one of the most experienced co-operative leaders the world has seen.

Dr Fabri is quite right in putting the question: A case of new wine in old bottles? This time round the bottle is not that old. The retouching has finally done away with a lot of ministerial and departmental powers that the previous legislation was riddled with.

But with Malta`s ambition to join the European Union very much on line, I would have expected a radical change in mentality.