5.1 The purpose of enacting cooperative law should be to give a legal status to the cooperatives and facilitate their working. It should also ensure that cooperatives work as genuine bodies and in accordance to the universally accepted cooperative principles. The legal framework for cooperatives consists of the law, rules made under it and the bye-laws adopted by the members of cooperatives in accordance to the act and rules. This together makes up procedures and rules for the organization and work of cooperatives, and protect and preserve their cooperative character. The Cooperative Law thus should facilitate the working of cooperatives and should not curtail the autonomous working of cooperatives and change their basic character. The day-to-day working regulations should be included in the bye-laws. Mr. P.E. Weeraman, the Regional Director of ICA ROAP, in the seventies stated that: “the greatest contribution that a government can make to the development of a cooperative movement is to introduce legislation that would give a legal framework and the necessary safeguards and privileges that would create an atmosphere conducive to cooperative development”.
5.2 The Cooperative Laws, as stated above, consists of a Cooperative Act, enacted by the legislature of the country; subsidiary to the Act, in some countries, rules framed by the Government; and bye-laws as adopted by the members and registered under the Act. In case of conflict among the three i.e. Act, Rules and Bye-Laws, the Act is supreme, followed by the Rules, and then Bye-Laws. The Act should include the basic provisions relating to the principles, membership, registration requirements, management pattern, arbitration, liquidation, etc. The best law is that which is simple and brief, which can be understood by the common man, and which does not need plethora of sub-rules. Working details should be left to the members, to be included in the bye-laws.
The important provisions of the law are examined under the following headings:
5.3 The countries covered are all members of NEDAC i.e. Bangladesh, Fiji, India, Indonesia, Japan, South Korea, Malaysia, Nepal, Philippines, Sri Lanka and Thailand. China is a member of NEDAC but does not have a cooperative law. It affects the development of rural co-operatives in China.
